A transformative year for Oil Search: Lee

OIL Search chairman Richard Lee has described 2014 as a transformative year for the company, despite the impact of low prices affecting oil field production and LNG sale prices.
A transformative year for Oil Search: Lee A transformative year for Oil Search: Lee A transformative year for Oil Search: Lee A transformative year for Oil Search: Lee A transformative year for Oil Search: Lee

Speaking at the company's annual general meeting on Friday, Lee said total production was nearly three times higher than 2013, reaching a record of 19.3 million barrels of oil equivalent.

The increase broke another record, with Oil Search taking in $US353.2 million ($A439.6 million) in net profit. Lee said the board was committed to sharing increased profits with shareholders.

The 2014 dividend was paid out at $0.14 per share, which was made up of the base $0.08 per share and the addition of a special dividend of $0.04 and an interim dividend of $0.02.

"This is in line with our new dividend policy, to pay out between 35% and 50% of core profits to shareholders, which we believe provides a good balance between providing cash returns to shareholders while retaining sufficient funds to reinvest in our value creating growth projects," Lee said.

In light of the tough price environment for oil and gas, the company has taken measures to reduce operational costs and capital expenditure. It also started a business optimisation program to strengthen efficiency and streamline its processes.

However, Oil Search is interested in expanding its licence portfolio in Papua New Guinea, sensing an opportunity to involve itself with Exxon Mobil's PNG LNG project and the development of the Total-led Elk Antelope project.

Lee said these remained "commercially attractive" because of LNG demand in the Asia Pacific region.

"The outlook for LNG demand, particularly in the Asia-Pacific region, remains strong and we are confident that these projects will prove attractive to potential customers, particularly as some of the other proposed LNG projects globally are starting to look challenged in the lower oil price environment," he said.

A number of resolutions were passed in the AGM including the re-election of Gerea Aopi, Rick Lee and Philemon to the Oil Search board, as well as the re-appointment of Deloitte Tohmatsu as the company's auditor.

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