Oil and gas producer, Oil Search Limited (ASX: OSH), today revealed its full-year results to the market.

For the year ended 31 December 2015, Oil Search posted a 52% increase in production to 29.25 million barrels of oil equivalent (mmboe), but reported a 2% fall in revenue. Last year’s net profit of $US353.2 million turned into a loss of $US39.4 million as a result of falling commodity prices.

Oil Search said the results were achieved despite “one of the most challenging years in recent history for the oil and gas industry.”

“Annual production of 29.3 mmboe was the highest in the Company’s history, reflecting a full year of very strong performance from the PNG LNG Project and a solid contribution from the Oil Search-operated oil fields in PNG,” Oil Search Managing Director, Peter Botten, said. “However, the increase in production was offset by significantly lower global oil and gas prices, with the average Brent price almost half 2014 levels.”

The company’s board declared an interim dividend of 4 US cents per share, taking the total yearly distribution to US 10 cents per share. “The 2015 payment represents a dividend payout ratio of 42%, consistent with the Board’s dividend policy of distributing between 35% and 50% of core profit,” Mr Botten added.

Oil Search’s proved and probable oil and gas reserves (2P) fell 9% and 5%, respectively, from last year reflecting the increase in production. Looking ahead, Mr Botten said the company is focused on “maximising cash flows” by improving operating efficiency.

The company expects total 2016 production to be in the range of 27.5 mmboe to 29.5 mmboe. Production costs are expected to fall, while capital costs are also expected to be lowered from $US539.1 million to between $US315 million and $US400 million.

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Motley Fool writer/analyst Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.