The company, which is Papua New Guinea’s largest petroleum outfit, posted a net profit of $US46.9 million ($A58.21 million) for the six months to June 30, compared to $US115.3 million ($A143.1 million) in the previous corresponding period.
Production of oil and gas was 9% lower at 4.74 million barrels of oil equivalent.
“After five consecutive years of profit growth, Oil Search’s profit performance in the first half of 2007 was impacted by increased exploration write-offs and higher non-cash charges," company managing director Peter Botten said.
He confirmed production in the second half of 2007 would be slightly higher due to a full six months of production from its NW Moran field, the tie-in of the successful Nabrajah 15 and 16 wells in Yemen, and increased production from Area A in Egypt following the completion of a workover program.
In addition, the company is set to start an exploration drilling program in PNG with three wells planned for this year and another four wells scheduled for 2008.
Late in the third quarter of this year the company will spud the Arakubi-1A well, about 5km east of Kutubu. The well targets potential oil reserves of about 20 million barrels of oil.
This will be followed by the NW Paua-1 exploration well that is expected to be drilled towards the end of the fourth quarter.
Oil Search said the well, on a structure next to the Moran ridge, is a high-risk probe that targets potential reserves of between 40-120 million barrels of oil.
The company will also spud, in the fourth quarter, the Korobosea-1 gas exploration well, about 30km north-east of the Kimu gas field.
Korobosea-1 has potential reserves of more than 500 billion cubic feet of gas.
Next year Oil Search will drill the Mananda Attic, Cobra and Wasuma oil exploration wells and the Barikewa gas exploration-apppraisal well, subject to rig availability and joint venture approvals.
Meanwhile, in the second half of this year, the company plans to drill the Thoub-1 and Dahgah-1 exploration wells in the onshore block 43, Yemen, as well as the Raheek-1 well in Egypt's East Ras Qattara block.
Up to three other exploration wells are planned in Area A, Egypt, while exploration is expected to resume in Yemen's Block 49 with the drilling of two wells.
Oil Search's 2008 drilling program in the Middle East includes its first wells in Blocks 3 and 7 in Yemen and in Block 18 offshore Libya.
Development drilling will also figure prominently in the company's plans with up to 11 wells scheduled for 2008. Three would be at the Moran field while up to eight wells will be drilled at Kutubu-Usano.
The added production is expected to make up for the company's first half ended June 30, 2007, production of 4.74 million barrels of oil equivalent.
In other news, Botten said the Kutubu, Agogo, Moran and Gobe Mail oil field partners had chosen to participate in the ExxonMobil-led liquefied natural gas pre- front-end engineering and design studies, bringing Oil Search's stake in the study group up to 36.6%.
He added the company had recently begun a strategic review designed to maximise the value of the company's producing assets in PNG.
"As the company moves to the development of its major gas resource in the 2012-14 timeframe, the review will also focus on new venture acquisition opportunities and the optimisation of production growth from PNG and the Middle East post 2009," Botten said.
