A retreat in the oil price has taken some of the gloss off Oil Search Limited's (ASX: OSH) March quarterly production report. Shares in the oil and gas company opened up 1% before giving up most of the gain to trade 0.4% higher at $8.13 by late morning.
The West Texas Intermediate (WTI) oil price eased 0.3% this morning to $US56.23 a barrel as management reaffirmed its full year production guidance of 26 to 28 million barrels of oil equivalent (mmboe).
Total revenue of $US472.3 million for the three months to March is nearly triple what Oil Search reported a year ago as production from its Papua New Guinea liquefied natural gas (PNG LNG) project kicked in from May last year.
However, the recent slide in the oil price and maintenance shutdown at PNG LNG meant that the latest revenue is 16% below the December quarter, while production of 6.91 mmboe is 5% under the same periods.
This isn't likely to prompt analysts to make any downgrades, at least nothing material, and most experts agree that Oil Search is one of the best placed large cap stock in the sector, thanks to the amount of cash its PNG LNG joint venture project with energy giant Exxon is forecast to generate.
In contrast, Woodside Petroleum Limited (ASX: WPL) is a little worse for wear today with its share easing 1.1% to $34.77 although Santos Ltd (ASX: STO) managed to chalk up a 0.3% gain to $7.96 following Santos' update on its GLNG project in Gladstone, Queensland, distracted investors from the falling oil price.
Santos will fire up its $US18.5 billion GLNG project and ship its first train of gas by the end of the September quarter.
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