CONOCOPHILLIPS says Australia Pacific LNG is on track for first cargo from Train 2 by the fourth quarter, and the project has not only set up a chunk of the US major's entire production base to have no decline for the next 20 years but boosted debt-heavy Origin Energy's revenue.
APLNG has sent 32 cargoes into the market, including 27 LNG cargoes this year alone.
That has driven a 57% increase in Origin's annual production and 15% uplift in revenue from 2015.
Origin's share of APLNG production increased by 91.6 petajoules-equivalent over the 12-month period, while BassGas output also rose by 3.7PJe, though that was partly offset by 9.4PJe lower production from the Otway Basin.
The Australian vertically integrated player's second quarter production of was up 68.4PJe over the March quarter, mainly due to greater production from APLNG and the Otway Basin following a planned shutdown between February and April.
After all this, Origin's revenue climbed 3% quarter on quarter.
Origin CEO integrated gas David Baldwin said APLNG Train 1 continued to perform well, with LNG production rates exceeding nameplate capacity.
First fire for the last two of seven gas turbine generators also occurred this month.
The company reported this morning that 16 LNG cargoes were loaded and shipped from the APLNG facility during the second quarter, including the first LNG shipment to Kansai Electric, with five more cargoes loaded and shipped this month.
"The Train 1 operational lenders' test is underway in support of releasing 60% of project finance shareholder guarantees in the second quarter of the 2017 financial year," Baldwin said.
"The release of the remaining 40% of project finance guarantees is expected to occur in calendar year 2017.
"Train 2 is entering the commissioning phase with first cargo on track for Q2 of the 2017 financial year."
Successful development drilling and better than expected performance in some fields boosted Origin's share of APLNG 2P reserves by 63PJe.
Meanwhile in Western Australia's Perth Basin, positive well results and an updated reservoir model led to an increase of revisions of 216PJe and 71PJe at Kupe in New Zealand's Taranaki Basin.
ConocoPhillips booster
During a conference call yesterday, ConocoPhillips CEO Ryan Lance said that once both APLNG trains are fully ramped up and its new oil sands projects at Surmont and FCCL are completed and running at full capacity, about a third of ConocoPhillips' entire production base will have no decline for the next two decades.
While the company is highly leveraged for a sustained rebound in crude prices which is at least a year or two off, the boost from those projects will prove to be a substantial long-term advantage.
APLNG helped ConocoPhillips beat its second quarter guidance with total company production of 1.546 billion barrels of oil equivalent per day, leading it to increase full-year guidance having also lowered its 2016 capital spend guidance from $5.7 billion to $5.5 billion.
ConocoPhillips also managed to improve production and operating expenses across the group by 20% year over year, and improved its adjusted operating costs by 18% year-on-year along with reducing full-year adjusted operating cost guidance.
Surmont is a steam-assisted gravity drainage bitumen recovery facility that that ConocoPhillips operates under a 50/50 joint venture agreement with Total.
FCCL refers to the Foster Creek, Christina Lake and Narrows Lake oil sands assets, along with other properties in the eastern Athabasca region, which are operated by Cenovus Energy, which has plans to expand to increase total gross production capacity to about 740,000bpd.
Production at Surmount was restored to prior quarter levels after the wildfires that savaged Alberta and impacted world oil prices, and first production was also achieved at Foster Creek Phase G in Canada.
Importantly, ConocoPhillips also managed to lower its debt by $US800 million, having completed $200 million in non-core asset sale, which brought the six-month 2016 total to $400 million, and Lance said the company was on track for about $1 billion of asset sale proceeds this year.
The company also inked a sale and purchase agreement for deepwater exploration blocks offshore Senegal in July, offloading them to Woodside Petroleum.
Lance said that while the price environment was still tough, he was confident the business was "running well", putting it in a good position as prices recover, which they are expected to do despite hitting three-month lows this week.
"During the quarter, we successfully completed significant turnaround activity and saw strong performance across the portfolio, which enabled us to improve our full-year guidance for production, capital expenditures and adjusted operating costs," Lance said.
"We are continuing to ramp up production from our APLNG and Surmont projects.
"We remain focused on successfully executing our operating plan, lowering the breakeven price of the business and positioning for strong momentum as prices recover."
