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AAP

2013-01-29

Oil Search produced 6.38 million barrels of oil equivalent (mmboe) in 2012, which the company said was within its guidance range.

Oil Search said on Tuesday that its production in the three months to the end of December 2012 was 1.79 mmboe.

During the quarter, 1.66 million barrels of oil was sold, at an average oil price of $US111.09 per barrel.

The crude oil inventory position increased by 81,000 barrels compared to the 2011 year-end position.

Operating revenue for the quarter was $US218.2 million while revenue for the 2012 full year was $US724.6 million.

"Oil Search finished the 2012 calendar year on a high note, with a strong fourth-quarter production performance from our core PNG (Papua New Guinea) oil fields and good progress made on the PNG LNG (liquefied natural gas) project and other growth opportunities, including gas expansion and material oil exploration," Oil Search managing director Peter Botton said in a statement.

The company said that at the end of 2012, the PNG LNG project was about 70 per cent complete and on track for first LNG sales in 2014.

Plant capacity had risen to 6.9 million metric tonnes per annum (mmtpa).

The estimated project cost has risen from $US15.7 billion to $US19 billion.

A number of major pieces of infrastructure had either been completed or were nearing completion, and the rest of the works were progressing in line with schedule.

Mr Botten said the rise in the cost of the project was disappointing, but the economic impact was largely offset by the five per cent increase in the LNG plant capacity and considerably higher oil prices.

Mr Botton said Oil Search continued to develop options for LNG growth.

Oil Search will release its full year financial results on February 26.

Shares in Oil Search were 14.5 cents, or 2.04 per cent, higher at $7.255 at 1108 AEDT on Tuesday.