Revenue slumped from $US562.1 million ($A730 million) to $US472.3 million as the lower liquids prices took a bite out of the bottom line.
LNG prices were down to an average of $US12.37/MMBtu, down 14% from the fourth quarter, while the average realised oil and condensate price declined 30%, to US$51.29/barrel.
The company is benefiting from its share in the PNG LNG project, which produced 5.27 million barrels of oil equivalent (23 billion cubic feet of gas and 75,000 barrels of oil and condensate) of total production of 6.91MMboe, down from 7.24MMboe in the previous quarter last year.
Production dipped due to scheduled maintenance at PNG LNG.
Overall, Oil Search says it is on target to deliver 2015 production within the 26-28MMboe guidance range.
PNG LNG's financial completion in February resulted in a $US850 million windfall with cash escrowed in the project's accounts being released, and taking cash to US$1.07 billion and debt of $US4.3 billion associated with the LNG project.
Oil Search managing director Peter Botten said lower energy price had prompted the company to review its 2014 strategic review, but that had only confirmed that the company's core strategy of focusing on expanding the LNG business.
"While the business is not immune from the significant decline in oil prices, Oil Search remains in a resilient position, both operationally and financially," he said.
PNG LNG was operating above expectations, delivering strong cash flows, while the separate oil and gas business in PNG also continues to perform reliably.
Work in 2015 will focus on gas commercialisation activities in the North-West Highlands and Gulf Provinces.
The PRL 3 joint venture starting the process of developing the large P'nyang field, which will support the potential expansion of the PNG LNG project and the supply of electricity and gas for domestic power generation under a deal with PNG power.
In addition, Oil Search announced the completion of the first phase of the Ramu power project, aimed at supplying power to the three million people who live within 20kms of the Ramu Grid, PNG's largest power grid.
On the drilling front the Antelope-5 appraisal well reached total depth during the quarter, encountering the gas carbonate reservoir broadly in line with prognosis, while Antelope-4 is drilling ahead to confirm the southern extent of the field.
Plans for new appraisal wells P'nyang and Antelope-6, plus the Antelope South-1 exploration well, targeting the Antelope Deep prospect, are ongoing.
Operator Total is finalising concept select studies and expects to determine the optimal development concept and move into pre-FEED in 2015.
A total of $US164.8 million was spent on exploration, development and production activities, of which more than half was related to exploration and evaluation activities in PNG and Kurdistan, primarily the Antelope appraisal wells, the exploration component of Hides F1 well testing the Hides Deep prospect.
The Hides F1 dual development/exploration well successfully intersected the producing Toro reservoir and was logged and cased as a future producer, however, the deeper exploration target, the Koi-Iange reservoir was found to be water-bearing.
Having sold out of Yemen, Oil Search remained focused on developing the Taza field in Kurdistan. Taza-3 is ongoing and Taza-2 successfully tested the deep Cretaceous Shiranish Formation. Preparations for a second flow test over the shallower Oligo-Miocene, Kirkuk, Euphrates and Jeribe Formations are underway.
Plans for Taza-4 using new 3D data are being progressed with the well aiming to drill in an area of greater fracture intensity, which should lead to higher flow rates.
In Tunisia, processing of data acquired from a 399 kilometre 2D survey over the Tajerouine PSC was completed and interpretation is underway.