Oil Search expects flat production into 2013 as natural field decline and processing shutdowns are offset by new exploration success.
The warning came after the oil and gas explorer and producer achieved the top end of last year’s target output range and a jump in annual revenue on the back of higher oil prices.
Shares in Oil Search closed up 18 cents, or 2.7 per cent, compared to a flat broader market.
The Papua New Guinea (PNG)-focused company on Tuesday reported revenue for the year to December 31 of $US732.9 million ($A697.77 million), up 25.6 per cent compared to calendar 2010.
The rise was driven by a 45 per cent increase in realised oil prices and offset a 10.6 per cent fall in sales volumes, the company said in a statement.
Oil Search produced 6.69 million barrels of oil equivalent (mmboe) last year, which was at the upper end of its guidance range of 6.2 to 6.7 mmboe.
Annual output was down almost 13 per cent on the previous year.
“It is a pleasing performance, given the maturity of our PNG oil fields and the impact on production from the two-week planned facilities shutdown in the third quarter,” managing director Peter Botten said.
Production in 2012 was expected to be in a similar range to 2011, Mr Botten said.
Recent exploration success and appraisal drilling within the company’s oil fields was expected to largely offset natural field decline this year but output would be affected by processing facility shutdowns.
The shutdowns would be undertaken to enable work related to the company’s key growth project, the $US15.7 billion ($A14.95 billion) Exxon-Mobil-led PNG LNG (liquefied natural gas) development that is 29 per cent held by Oil Search.
Mr Botten said production was likely to remain largely flat into 2013, assuming planned development activities were successful.
Oil Search said good progress was being made on all aspects of the PNG LNG project, which remained on track for first sales in 2014.
The company also said it was poised to embark on the largest drilling program in its history.
