Oil Search Profit Drops 89% as Oil Slump Counters LNG Output

(Bloomberg) -- Oil Search Ltd. posted a 89 percent fall in first-half profit as a drop in energy prices offset increased output at the Papua New Guinea-focused company.

Net income was $25.6 million, compared with $227.5 million last year, the Sydney-based company said Tuesday in a statement. The result compared with expectations for $38 million, according to the average of three analysts surveyed by Bloomberg as lower commodity prices weighed on the profitability of the company.

Oil Search fell as much as 2 percent to A$7.29 in Sydney before paring its loss to trade at A$7.395 at 12:43 p.m. local time. The benchmark S&P/ASX 200 Index gained 0.9 percent.

The price Oil Search received for oil and condensate prices fell 27 percent from the year before while liquefied natural gas prices dropped 40 percent. Oil Search slashed its interim dividend to 1 cent from 6 cents a share previously.

Oil Search, which lost a $2.5 billion battle for control of InterOil Corp to Exxon Mobil Corp. in July, last month said revenue fell 33 percent even as production climbed 4 percent. Brent oil averaged about $41.20 a barrel for the first half, more than 30 percent less than the corresponding period in 2015.

Oil Search’s realized price of $5.23 per million British thermal units for its gas in the second quarter is lower than rival Woodside Petroleum Ltd., according to data compiled by Bloomberg.