On the face of it, this shouldn’t be surprising since the two commodities they are involved with are also enjoying extremely high world prices.

But traditionally PNG stocks have generally suffered a discount because of perceptions of political and country risk, and national elections, which are about to be held, are traditionally a time of significant conflict

So the buoyancy of these two stocks is a sign of greatly increased foreign investor confidence in PNG.

Many junior explorers are reporting they have had no difficulty raising funds, particularly in the UK and Canadian markets for activities in PNG.

In recent weeks major American fund managers have become significant stakeholders in both Oil Search and Lihir, signaling their confidence that these companies will continue to be good corporate performers.

Underlying this is also their confidence that the next government that will be formed in July is not likely to adversely affect the investment climate.

The fiscal situation in PNG has been good over the last four years and the country has enjoyed its longest period of sustained growth.

Foreign debt is now at much more manageable levels and foreign exchange reserves are at an all-time high, providing confidence that the kina will remain stable.

In recent weeks the market capitalisation for Lihir Gold has surpassed A$5 billion, a first for any listed company with mainly PNG operations.

Oil Search’s market cap is also standing at a near record A$4 billion.

Oil Search is providing the cornerstone for two separate large LNG projects that are under study by ExxonMobil and British Gas respectively. A third proposal involving a mid-sized plant of around a million tonnes a year could also involve Oil Search.

In the last few years Oil Search has also become active in the Middle East and North Africa. In Yemen, it make an oil discovery with its first well and operations became cash-flow positive in the first year.

It now looks like repeating this success in Egypt, where initial exploration has led to expectations of oil production in the third quarter of this year.