Oil Search released an updated reserve statement late Thursday revealing a proven (1P) reserve base of 84.7 million barrels of oil equivalent – 4.3mmboe lower than in 2004. But Oil Search said after adjusting for 2005 net production of 12.2mmboe, its reserve position was 7.9mmboe higher.
“This reflected an increase of 18.3 million bbls in oil reserves at Kutubu, Gobe and Nabrajah, offset by a downward revision of 10.5 million bbls in oil reserves at Moran and SE Mananda,” the company said.
While proven and probable reserves (2P) were reported to be 111.3mmboe – a drop of 15.8% or 20.9mmboe for 2005. After adjustment for 2005 output, the drop was 8.7mmboe.
Oil Search said the decline in 2P reserves was again due to downward revisions at two of its PNG fields, SE Mananda and Moran, of 24.2 million bbls. Similar to its 1P reserve position, this was again offset by reserve additions of 15.4 million bbls at Kutubu, Gobe and Nabrajah.
“Excluding SE Mananda, gross ultimate recoverable oil reserves from the PNG oilfields have increased by 43 million bbls over the past four years,” Oil Search said.
“This reflects Oil Search’s campaign to refocus the joint venturers on maximising oil reserves through intensive engineering and geological efforts, a program which commenced in 2002 and accelerated in late 2003 when Oil Search became operator of the oil fields.”
“While the company’s net reserves position has fallen this year, it is anticipated that, with ongoing appraisal at Nabrajah and an increased exploration program, this position will improve, excluding the likely reserves additions that will be realised when the PNG Gas Project reaches financial close.”
Oil Search noted that as the review took place prior to the finalisation of the sale of various interests in its PNG assets to the Australian Gas Light, the divestment is not reflected in the reserves statement.
An adjustment to the sale price of around $US17 million ($A23 million) in favour of AGL was also flagged as a result of the reserve statement.
“This adjustment amount reflects a combination of factors including a reduction in the level of total reserves sold and changes in expected future capital and operating expenditure required to produce those reserves. The adjustment amount is expected to be settled and paid in May 2006,” the company said.
