Oil Search shares fell on Tuesday after its Q4 and 2018 performance came in a bit lower than optimistic analysts forecasts and its guidance for the coming year was weaker than analysts had wanted to see.
That was despite a strong rise in LNG revenues because of the continuing boom in Chinese demand.
The shares ended down 2.8% at $7.58 after a 29% jump in its fourth-quarter revenue was not enough for some analysts (RBC reckons the report was under their estimates and a bit ‘light on’).
Oil Search said it expects total production of 28.0 million to 31.5 million barrels of oil equivalent (MMBOE) in 2019 (it has a calendar based financial year), compared with its 2018 guidance range of 25 to 26 mmboe.
Total revenue for the December quarter rose to $US503.1 million from $US389 million in the same quarter a year earlier, the company said, while production for the quarter fell to 7.44 mmboe from 7.59 mmboe.
Revenue growth was driven primarily by stronger sales and realised prices.
Total revenue for the year rose 6% to $US1.535 billion and for that the company and its partners in the PNG LNG project can thank China and its soaring demand for LNG that helped boost prices in the Asia basin by close to 40% in 2018.
Annual production came in at 25.21 mmboe, but was lower than forecast at the start of 2018 because of the impact of the big earthquakes in the western highlands of Papua New Guinea last February.
Oil Search said the average realised oil and condensate price was $US64.45 per barrel over the quarter, compared with $US63.05 a year earlier, while the average realised gas and liquefied natural gas (LNG) price surged 39% to $US10.96 per million BTU from $US7.86 per million BTU.
In November, the Papua New Guinea government agreed to finalise terms this year for an expansion lof the PNG LNG project led by partners Total and Exxon Mobil.
