Oil Search attributed the 140% increase to higher oil sales and better realised oil prices.

The company’s net third quarter production was 3.24 million barrels of oil – slightly above the record production rate recorded in the second quarter of this year, when daily gross oil production in the PNG oil fields peaked at over 55,000 barrels per day, the highest rate since 2001.

Meanwhile, oil sales for the quarter totalled 3.32 million barrels – 330,000 barrels higher than oil production – partially unwinding the underlift program seen in the first half.

Managing director Peter Botten said the highlight of this period was the significant progress made by the PNG Gas Project. This includes the July signing of two conditional gas sales agreement and a conditional agreement with AGL to aquire a 10% interest in the project.

"Production from our mature Papua New Guinea oil fields continued to beat the decline curve and was maintained at high levels throughout the third quarter," said Botten.

“There were particularly pleasing performances at both Kutubu and SE Gobe, the latter benefiting from the recent new oil pool discovery at SEG 11. Kutubu production was 30% higher than the previous corresponding period, attesting to the success of our drilling and production optimiation program over the past year.”

As at the end of September, front end engineering and design (FEED) activity on the PNG Gas Project was 91% complete and all activities remained on schedule for a project sanction decision in the first half of next year, he said.

The third quarter also saw first production from Oil Search's first development outside PNG, the Nabrajah field in Yemen.

"While production is currently small, the field has substantial upside potential," Botten said.

Located in Block 43, the field commenced production in July last year and by the end of the quarter was producing at a rate of around 7,500 barrels per day. During the quarter, Nabrajah-8, the first well of a four well appraisal program of the deeper Basement, started drilling.

Meanwhile, the NW Moran Extended Production Test (EPT) started operations last month at an average rate of around 2,800 bopd. During the quarter, SE Mananda oil field development continued, with good progress made on the bridge over the Hegigio Gorge, said Oil Search. However, it added that pipeline-laying activities were still being affected by adverse weather,

Oil Search was awarded three new exploration areas in Yemen in July, and this month acquired a package of exploration and production interests in Egypt.

At the end of September, Oil Search had cash of just under US$171 million, while debt was US$136.5 million.

The company also achieved an average oil price of US$63.19 per barrel for the period, compared to US$54.34 per barrel in the second quarter of 2005 and $US45.07 per barrel in the corresponding quarter of 2004.