The Oil Search Limited (ASX: OSH) share price is already up 2.32% in early trading today, on the backs of good news for the company out of Papua New Guinea and a generally rising Aussie market. Oil Search shares have been rising all week, but at $7.06 at time of writing it's still well below its high of $9.22 in October 2018, and its all-time high of $9.80 in June 2014. So, should you be buying today?
Good news from Papua New Guinea
On Monday, the Papua New Guinea government released the results of a review into the Papua LNG Gas Agreement. This review begun after the previous Papuan Prime Minister Peter O'Neill was forced to resign by turmoil in the country's parliament in May.
The review had caused months of uncertainty for Oil Search. This Papuan political instability is a large part of why the Oil Search share price has been falling since April, to as low as $6.31, where it closed on Friday.
Oil Search saw strong financial results in its half-year report, released 20 August. Net profit after tax was 105% higher than the same period of 2018, operating cash flows were up 72% as a result of both higher sales and higher LNG prices, and net debt 15% lower than first half 2018. These results should have seen a rise in the share price, but only caused a slight bump that was quickly reversed. We can likely blame that on the ongoing uncertainty hanging over Oil Search's Papua New Guinean assets.
So, should you buy Oil Search today?
With the new Papua New Guinean leadership's review into the LNG agreement finally completed, Oil Search's shares have taken off. The rise so far this week has already been sharp, but there's still plenty of room to rise if Oil Search is going to return to the highs it reached before this Papuan political chaos began to weigh on the share price.
With oil prices set to rise on generally good global economic news this week, particularly out of China's economy and the easing of Brexit concerns, all the signs are pointing to Oil Search continuing to perform well.
