Profit after tax but before non-core items was US$52.1 million, 29% higher than in the first half of 2003.

Production of oil and gas during the period was a record 5.615 million barrels of oil equivalent, up 13% on the previous corresponding period, with oil production of 5.091 million barrels. Revenues were based on oil sales of 4.345 million barrels, which more than offset the impact of the sale of the company’s 20% interest in the Porgera Gold Mine in late 2003.

The company also made significant progress in the development of the NW Moran field with production expected in early 2005, and the SE Mananda oil fields which are nearing completion.

Alignment was achieved during the period between Oil Search and ExxonMobil on the way forward for the Highlands Gas Project. Confirmation of one more customer is required before the Project partners can make a decision on Front End Engineering and Design.

“Since taking over operatorship of the PNG oil fields last year, our initiatives have added about 7,500bopd of production at Kutubu, have discovered a new oil pool in this high value field and have started to deliver increasing production at Moran,” said managing director Peter Botten.

Oil Search’s second exploration well in Yemen, Nabrajah-1, discovered oil and was suspended as a potential producer, having flowed oil at a combined rate in excess of 2,500 barrels per day from two zones. The discovery is currently being appraised with a two well drilling program.

“The strong production and earnings performance in the first half of 2004 represents the fifth consecutive half-year rise in profitability to a new record for the company. Clearly, strong oil prices have played an important part in rising earnings. However, our sustained production growth also reflects very successful acquisitions.”