Oz Oil Search Reports 30% Drop in Q2 Revenues

Sydney-listed Oil Search July 21 reported a 30% yr/yr drop in revenue for the three months to June 30 (Q2 2020) owing to lower product prices.

The company’s revenue for the quarter was $266mn (A$376mn), lower than the $378.9mn for the same period last year. The average oil and condensate price realised during the quarter was $23.05/barrel, down from US$68.67/b, Oil Search said. The average price realised for LNG and gas sales was $7.34/mn Btu versus $9.3/mn Btu in the same quarter of last year.

Total production was 7.29mn barrels of oil equivalent, up 6% yr/yr. This included 6.40mn boe from the PNG LNG project, which produced at an annualised rate of 8.8mn metric tons/year during the period, and 0.89mn boe from Oil Search-operated assets.

Oil Search said it has raised its 2020 production forecast to 24.5-25.5mn boe from 24-25mn boe previously, helped by a deferment in scheduled maintenance.

Last week, the company said it expects to recognise a non-cash, pre-tax impairment charge of $360-400mn ($250-300mn on a post-tax basis) in its half-yearly results, which are scheduled to be released in August. Earlier this month, Oil Search announced it has reduced its workforce by about 34% to tackle the slowdown created by Covid-19 pandemic. The company said other steps were being coordinated to cut costs further. It had cut its capital expenditure budget in March by 38%.