The Oil Search Limited (ASX: OSH) share price is flat this morning at $8.09 after the PNG-based LNG producer reported it sold 6.65 million barrels of oil equivalent (boe) over the quarter ending March 31 2019, compared to 7.82 million boe in the quarter ending December 31 2018.
This sales drop translated into a 21% revenue fall to US$398 million over the quarter, compared to US$503.1 million in the prior quarter. The fact that revenue fell faster than production and sales volumes suggests the company received a lower average price per boe for its LNG product over the quarter.
Management noting: "Total product sales were 15% lower than in the fourth quarter, primarily due to the timing of LNG shipments, with three LNG cargoes on the water at the end of the period, compared to one at the end of the previous quarter. Revenue was also impacted by weaker global energy prices, with the realised oil and condensate price down 3% and the realised LNG and gas price 7% lower than in the fourth quarter of 2018."
For anyone interested investing in the oil or LNG space because they're bullish on oil prices for example, Oil Search is often flagged as one of the highest quality businesses on the ASX thanks to the quality of its PNG LNG assets.
The other crown jewel on the ASX for oil bulls is probably WA-based Woodside Petroleum Limited (ASX: WPL) thanks to its high quality assets, dominance, scale, and balance sheet firepower. However, these businesses are only for anyone enthusiastic about the long-term direction of fossil fuel prices.
