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How does Oil Search stack up?

Three of Australia’s big oil and gas explorers and producers have now delivered their second-quarter updates to investors, the latest of them were results announced yesterday by Oil Search (ASX: OSH).

The first two companies, Woodside Petroleum (ASX: WPL) and Santos (ASX: STO), presented results with few surprises and hints of marginal growth for the first half of the year despite quarterly production for both companies being down on the equivalent period last year. So how did Oil Search stack up?

Production levels for Oil Search dropped 9.7% year-on-year which the company attributed to the timing of shipments, but were 4.2% higher than in the first quarter of the year.

This compares to Woodside Petroleum’s drop in quarterly production by 0.6% year-on-year which was due to a previously announced unscheduled shutdown at Pluto LNG. Santos for its part saw production drop by 5% year-on-year because of lower production from the company’s Cooper Basin and Indonesia sites.

Promisingly for Oil Search, investors’ full year guidance was unchanged and the company is targeting full-year production of between 6.2 and 6.7 million barrels of oil equivalent (mmboe). Both Woodside and Santos revised down their full year 2013 guidance by around 3% to 5%.

Oil Search and Santos both announced lower average pricing for crude oil produced in the second quarter, but with oil prices starting to rise again since June this could turn around for the second half of the year.

All three companies had positive business developments over the quarter. Santos and Oil Search have reached 90% completion of the PNG LNG joint venture both parties are participating in and are now entering the next phase of the project, shifting from construction through to commission. Oil Search made one additional gas find and two oil discoveries in the quarter.

Woodside meanwhile announced it had won two bids to take up to 90% share in exploration licenses of blocks in the porcupine basin in Ireland in continuing efforts to secure new international oil and gas discoveries.

Foolish takeaway

The results presented by Oil Search stack up pretty well by comparison. It may not have been a watershed quarter for any of the companies, but all eyes of Oil Search investors will be firmly fixed on the final stages of the PNG LNG project, which is forecast to increase the company’s production by up to 400%.

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Motley Fool contributor Regan Pearson does not own shares in any of the companies mentioned in this article.

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