This morning Oil Search Limited (ASX: OSH) posted total revenues for 2014 more than double those of 2013, with fourth quarter 2014 production of 7.24 million barrels of oil equivalent (mmboe) up 8% over the prior quarter.
The Papua New Guinea (PNG) based oil and gas business has been hit hard by the precipitous fall in oil prices in the second half of 2014, although it did state that the majority of its production portfolio remains profitable at current prices.
The business also said it was fortunate to have already completed almost all the construction expenditure on its flagship PNG LNG project, with the long-term material benefits already starting to flow.
Papua New Guinea is perfectly positioned to ship LNG to energy-hungry Asian markets and investors will be hoping the company is able to ride out the oil price storm without too much damage.
Average oil revenues were down 7% in the most recent quarter, compared to the prior quarter, although LNG revenues were slightly higher reflecting the increasing production of the PNG LNG project.
The company announced it has undertaken an old-fashioned "strategic review" in response to the oil price declines and expects to announce US$150-$200 million of asset impairments primarily as the value of some exploration licenses sinks.
Costs and capital expenditure are also under the microscope with more detail to be provided when full year results are released to the market on 24 February 2015. The stock is down 2.95% to $7.56 in morning trade.
Other major energy businesses feeling the pinch recently Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO), but none of these businesses are The Motley Fool's top pick to capitalise on the potential for rebounding energy prices in 2015/16.
