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23-10-2014, 11:14 PM
http://www.oilsearch.com/
http://www.oilsearch.com/Investor-Centre.html
Dividends flow for Oil Search as PNG LNG plant kicks in
THE AUSTRALIAN OCTOBER 24, 2014 12:00AM
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Matt Chambers
Resources Reporter
Melbourne
Peter Botten, CEO of Oil Search results announcement , Sydney, February 26, 2013. Pic - Sam Mooy
Oil Search chief executive Peter Botten. Picture: Sam Mooy Source: News Limited
OIL Search has locked in future dividends for shareholders from the wave of cash coming its way now the $US19 billion ($21.7bn) Papua New Guinea LNG plant is up and running, flagging that up to half its profits would be returned to shareholders.
The rest would be used to chase low-cost LNG growth in PNG, where managing director Peter Botten stepped up his campaign to use the existing PNG LNG infrastructure to develop the big onshore Elk/Antelope field that it owns with InterOil and France’s Total.
In a strategy presentation to analysts, Oil Search said it would return between 35 per cent and 50 per cent of its new and expanded profits to shareholders, which was in line with analysts’ expectations of about 25c a share from next year.
Mr Botten admitted there was not much new to reveal in the briefing. “The bottom line is that Oil Search is predictable: it’s evolution, not revolution,” said the long-time managing director, who has flagged that he would step down in the next two years.
“The system of value delivery is not broken ... let’s continue doing it.”
Mr Botten said he wanted to see a final investment decision on an expansion of PNG LNG in 2016, hopefully with gas from Elk/Antelope.
InterOil and Total, whose entry into the joint venture Oil Search is contesting through arbitration on the grounds it had pre-emptive rights, have said they want a separate project.
In a complex set of events earlier this year, Total outbid PNG LNG operator Exxon to agree to buy a share of Elk/Antelope from InterOil.
But Oil Search thwarted the deal when it bought out minority interests and took its own stake. Total has since bought some of InterOil’s stake but Oil Search maintains it should have pre-emptive rights over the sale.
The matter goes to international arbitration next month and Mr Botten said he hoped it would be sorted out in the first quarter and that who was actually in the joint venture would be determined.
Oil Search estimates that by using PNG LNG infrastructure, $US3bn of capital costs could be saved and first LNG could be brought on two years earlier.
“The government wants to see big resources committed to development in a rational way,” Mr Botten said.
Of course, if PNG LNG infrastructure was used, partners Exxon and Santos would be keen to extract a decent price.
Mr Botten stressed the strong economics of PNG’s in-production and undeveloped gas resources, and said two-thirds of international oil companies needed prices of $US90 a barrel to cover commitments.
http://www.oilsearch.com/Investor-Centre.html
Dividends flow for Oil Search as PNG LNG plant kicks in
THE AUSTRALIAN OCTOBER 24, 2014 12:00AM
Save for later
Matt Chambers
Resources Reporter
Melbourne
Peter Botten, CEO of Oil Search results announcement , Sydney, February 26, 2013. Pic - Sam Mooy
Oil Search chief executive Peter Botten. Picture: Sam Mooy Source: News Limited
OIL Search has locked in future dividends for shareholders from the wave of cash coming its way now the $US19 billion ($21.7bn) Papua New Guinea LNG plant is up and running, flagging that up to half its profits would be returned to shareholders.
The rest would be used to chase low-cost LNG growth in PNG, where managing director Peter Botten stepped up his campaign to use the existing PNG LNG infrastructure to develop the big onshore Elk/Antelope field that it owns with InterOil and France’s Total.
In a strategy presentation to analysts, Oil Search said it would return between 35 per cent and 50 per cent of its new and expanded profits to shareholders, which was in line with analysts’ expectations of about 25c a share from next year.
Mr Botten admitted there was not much new to reveal in the briefing. “The bottom line is that Oil Search is predictable: it’s evolution, not revolution,” said the long-time managing director, who has flagged that he would step down in the next two years.
“The system of value delivery is not broken ... let’s continue doing it.”
Mr Botten said he wanted to see a final investment decision on an expansion of PNG LNG in 2016, hopefully with gas from Elk/Antelope.
InterOil and Total, whose entry into the joint venture Oil Search is contesting through arbitration on the grounds it had pre-emptive rights, have said they want a separate project.
In a complex set of events earlier this year, Total outbid PNG LNG operator Exxon to agree to buy a share of Elk/Antelope from InterOil.
But Oil Search thwarted the deal when it bought out minority interests and took its own stake. Total has since bought some of InterOil’s stake but Oil Search maintains it should have pre-emptive rights over the sale.
The matter goes to international arbitration next month and Mr Botten said he hoped it would be sorted out in the first quarter and that who was actually in the joint venture would be determined.
Oil Search estimates that by using PNG LNG infrastructure, $US3bn of capital costs could be saved and first LNG could be brought on two years earlier.
“The government wants to see big resources committed to development in a rational way,” Mr Botten said.
Of course, if PNG LNG infrastructure was used, partners Exxon and Santos would be keen to extract a decent price.
Mr Botten stressed the strong economics of PNG’s in-production and undeveloped gas resources, and said two-thirds of international oil companies needed prices of $US90 a barrel to cover commitments.