Oil Search Finds Exploration Success Offshore Papua New Guinea

Australian company Oil Search Ltd. has reported encouraging results from a new exploration campaign started earlier this year offshore Papua New Guinea (PNG) in the Gulf of Papua.

Oil Search said ongoing exploration success highlighted the company’s activities during the second quarter of 2013.

As part of its second quarter results, Oil Search said exploration at two wells – Flinders and Hagana – returned “highly significant results” by not only proving the existence of turbidite sand play, but also the potential for gas charge and retention.

“A gas column was discovered within a thick sand with good reservoir properties at the first well, Flinders,” Peter Botten, managing director of Oil Search, said.

“At Hagana, the second well in the programme, a similarly thick, good quality sand, albeit water wet, was found within the primary upper objective while preliminary interpretation of logs recently acquired in the deeper secondary indicates this zone is gas-bearing.”

The company added that volumes at Flinders and Hagana were likely to be “relatively modest”, but sufficient enough to take up a further well option and drilling at the Kidukidu prospect once work at Hagana-1 had been completed.

Oil Search, which is a 29 percent stakeholder in the massive PNG LNG project, also reported that preparation was now under way to apply to the PNG Government for an oil field development licence after oil was discovered at the Toro and Digimu prospects in the country’s highlands.

Meanwhile, Oil Search recorded sales of 1.64 million barrels of oil during the three-month period, which pushed revenue for the quarter to $204.9 million. Revenue for the first half of 2013 was $381 million and output reached 3.19 million barrels of oil. The company’s full-year production guidance remains unchanged at 6.2 to 6.7 million barrels.

Oil sales volumes were 33 percent higher compared to the previous three-month period, but were offset by a fall in global oil prices, with average prices falling from $113.92 per barrel to $104.58 in the period.

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