Morningstar

Morningstar, Inc.

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Our AUD 7.00 per share fair value estimate for no-moat Oil Search Limited stands. There has been no change to the status of major projects since a number of recent announcements already reported by us. These include the Papua LNG Project continuing to advance towards front end engineering and design, or FEED, entry with the associated gas agreement signed in April and the access agreement to the PNG LNG site and infrastructure ready for execution. Additionally, the Alaska Slope interests are…

Oil Search bought its 25.5% Pikka Unit and 37.5% Horseshoe Block interests on Alaska’s North Slope approximately 18 months ago for USD 400 million or AUD 0.38 per share. Our fair value estimate had until recently carried the Alaska stakes at cost, before Oil Search flagged material though still unquantified exploration success, and we conservatively upgraded to USD 600 million or AUD 0.56 per share, equivalent to 8.0% of fair value overall. This equates to a value of USD 4.70 per barrel based on…

Oil Search shares are down approximately 20% from this time a year ago and now trade close to our unchanged AUD 7.00 fair value. PNG LNG comprises the lion's AUD 4.90 or 70% share of that fair value contributing 26 million barrels of oil equivalent, or mmboe, or 90% of Oil Search's current 29.5 mmboe in group annual production. But PNG LNG expansion plans are afoot, 100% risked in our base case, and could increase group equity production, by approximately 60% to 47mmboe
Considerable associated…

Oil Search is an oil and gas producer based in Papua New Guinea, or PNG. Much of the company's perceived value is in substantial gas resources being gradually unlocked by LNG infrastructure. The USD 19 billion PNG liquefied natural gas, or LNG, plant went a long way towards countering stagnating traditional oilfield productivity monetising isolated, but high-quality, gas resources. PNG gas is liquids-rich, which increases its value, but the entire proposition carries substantial risk because of…

We increase our Oil Search fair value estimate by 6% to AUD 7.00 per share, as a result of both higher near-term Brent crude prices and the time value of money. We up our 2019 and 2020 Brent crude price forecasts by 9.1% and 9.6% to USD 68.15 per barrel and USD 67.65 per barrel, respectively, in line with the futures curve. Our long-term Brent price forecast is unchanged at USD 60 per barrel in 2021 dollars. Higher prices drive our 2019 and 2020 EPS forecasts 18% and 23% higher to AUD 0.35 and…

Australia

Oil Search Limited explores for and produces gas and oil through operations in Papua New Guinea.  The Company's activities are located in the Papuan Highlands which include the Kutubu, Hides, and Gobe oil and gas projects.

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