Oil Search has brought a strong financial year in 2020 with a core net profit after tax of US$22.0million (K77m), also reported to a full-year production of 29.0 mmboe and the strongest safety performance since assuming operatorship in 2003.
The financial results were significantly lower realised hydrocarbon prices in 2020 as compared to 2019, which resulted in a full-year net loss of US$320.7 million (K1.1bn). This includes a post-tax impairment charge of US$260.2 million (K908.7m) that had been recognised in the interim financial results.
For managing director Dr Keiran Wulff, “Oil Search emerged from 2020 stronger and more resilient as a result of its response to the Covid-19 pandemic, demand collapse and oil price downturn. Despite the material challenges, Oil Search achieved three important records for the year. The first is the strongest safety performance in PNG since becoming the operator of the PNG oil fields in 2003, with a total recordable incident rate of 0.78 per million hours worked, and no Tier 1 process safety events.”
According to Wulff, the second is the strongest production reliability from its operations in PNG since the 2018 earthquake and, the delivery of record annual production from the PNG LNG project.
He said that the company brought down some decisive actions.
“We also undertook a major strategic review to prioritise activities and capital spend for a low carbon future,” he said. “This resulted in streamlining our portfolio and incurring a non-recurring, post-tax impairment charge of US$260.2 million (K908.7m). We are a more focused, leaner and lower cost resilient business in a strong position to commercialise our world-class resource base and leverage the oil price. We will continue to focus on maximising operating cash flow and delivering material growth projects which will be underpinned by resilient operations and disciplined capital management. We have set up a dedicated transformation team to embed a high-performance culture across the business.”
