Oil Search returns to profit in H1
Sydney-listed Oil Search on August 24 reported a net profit of $139mn in the six months to June 30 (H1) owing to higher oil and gas prices. It had reported a loss of $266mn in the same period of last year.
“Oil and LNG markets have continued to recover from the initial economic impacts of the COVID-19 pandemic led by a robust demand rebound in Asia,” Oil Search’s acting CEO, Peter Fredricson, said. “We have seen a significant increase in core earnings, reflecting higher realised oil prices and a sustained focus on reducing underlying costs, whilst a lower net debt position has contributed to a significant improvement in the company’s overall financial strength.”
|
Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. |
Oil Search’s core profit came in at $139mn, up 463% year/year from $25mn in the same period last year. The company’s revenue in H1 was up 7% yr/yr to $668mn.
Commenting on the merger with Santos, Fredricson said due diligence is currently underway and the parties have started negotiations on a merger implementation deed. “Subject to each party completing due diligence on the other and the parties entering into a binding merger implementation deed, the intention of the Oil Search board is to unanimously recommend that shareholders vote in favour of the revised Santos proposal,” he said.
“Any such recommendation will be subject to an independent expert concluding that the proposal is in the best interests of Oil Search shareholders, and to no superior proposal being received,” Fredricson added.
If the transaction is approved, Santos will acquire all Oil Search shares by exchanging 0.6275 new Santos shares for each Oil Search share at completion.
Looking ahead, Fredricson said that Santos is on track to meet its previously stated production and cost guidance and “to deliver a strong 2021 full-year result”.
“We continue to take full advantage of the ongoing recovery in oil and condensate prices as benefits from increased contracted LNG prices flow into the second half of the year,” he said.