A report by JB Were also paints the company's newly won operatorship in PNG as a double edged sword. The report says that the transition to operator will depend greatly on the success of the transition of management and the implementation of IT systems.

If the transition doesn't go as smoothly as planned then production and earnings could be negatively impacted. Luckily the company has decided to carry over the existing IT systems will be carried over and not changed, something that JB Were had identified as a key risk.

Oil Search also reported that had they been successful in securing the Alcan contract it would have generated sufficient demand to move to project sanction of the PNG gas pipeline, not just the FEED contract level, based on a total of only 100-115PJ/pa. However, this now hypothetical projection was based on the company finalising another agreement of 25PJ/pa with MIM, which is still considered to be highly conditional.

Marketing activities for the pipeline will continue with a focus on Queensland and the southern states before a final go/no go decision is made.

Overall the company is depending on some positive news for the Gas project and some new discoveries to replace declining production. JB Were's long term recommendation, hold.