AAP
Energy player Oil Search is cashed up and well placed to take on acquisitions despite swinging to a $US39.4 million ($A54.45 million) full year loss. The Papua New Guinea-focused oil and gas company says record production levels and low production costs have helped shield it from tumbling commodity prices. The tough times overall will present opportunities for Oil Search, managing director Peter Botten says. "There are opportunities in PNG and, as the seller and buyer spread narrows through this cycle, we will continue to look at optimising our portfolio in PNG," he told reporters on Tuesday. "I don't see it's all doom and gloom. I think it's an exciting time to be in the business but one that requires very close management of cash flows, costs and extracting the maximum value of every dollar or (PNG) kina spent."While Oil Search's loss compared to a $US353.2 million profit for the previous 12 months, the latest result was weighed on by an earlier-flagged impairment charge of almost $US353 million related to assets in Kurdistan. Oil Search produced 29.25 million barrels of oil equivalent in 2015, a jump of 52 per cent on the previous year and the highest output since it was founded in 1929. Production costs were at $US10.08 a barrel, down from $US12.21 a barrel. The company expects to cut production costs by a further 25 per cent in 2016. "We have the advantage over many companies that ... our cash operating margin is one of the highest in our region at about 73 per cent," Mr Botten said. At the end of 2015, the company's liquidity totalled $US1.66 billion, including $US910.5 million in cash. During 2015, Oil Search received and rejected a takeover bid by energy giant Woodside Petroleum, based on one Woodside share for every four Oil Search shares. On Tuesday, Mr Botten said Oil Search had not received any subsequent offers, but he reiterated his stance that his company was still open to offers, at the right price. "I think in business, everything is for sale at the right price," he said. Like other energy players, Oil Search has been faced in 2015 by falling prices; a 47 per cent drop on average to just over $US51.00 for oil and a 32 per fall for gas over the same period. This has effected its revenue, down two per cent to $US1.586 billion. At 1450 AEDT, Oil Search shares were down 23 cents, or 3.2 per cent, to $7.02. OIL SEARCH SHIELDS AGAINST PRICE FALLS * Net loss $US39.4 million vs a $US353.2 million profit * Revenue down two per cent to $US1.586 billion. * Total dividend 10 cents a share, from 14 cents. AAP
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