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Oil Search Rises On Positive Papua New Guinea LNG Project Update

Stuart Lucy

Stuart Lucy is an Investment Specialist at the Australian Stock Report, and has gained exposure to funds management and investment banking throughout his career. He draws on this experience to provide macroeconomic commentary and actionable investment insights to clients. Stuart is responsible for writing reports, is involved in delivering Macrovue webinars and provides general advice to our members on portfolio construction. Stuart currently holds RG146 General and Securities qualifications.

Oil-Search-Price-Rise-OSH

Oil Search (ASX: OSH) is one of the few lights on the ASX this morning, up slightly above 3% following a positive update on their Papua New Guinea LNG project. The essence of the announcement centres on the decision of PNG’s cabinet to stand behind the agreement they signed with Oil Search earlier this year. This allows the company to go ahead with capacity increases at the Papua LNG project, part of a $20.6bn expansion of LNG facilities between a few major players in the industry. The company is hoping to quickly finalise the P’nyang Gas Agreement that will enable further project development against a more stable regulatory backdrop.

Oil Search’s share price sat in correction territory over the past 3 months, due to the PNG Government’s decision to review the project. The review affected a potential $20.6bn expansion of LNG production facilities, in addition to creating clouds over the prospects for Oil Search’s existing projects. PNG was already at a disadvantage as a production jurisdiction, with several business leaders in the industry speculating that the country’s deteriorating regulatory environment made it a harder place to do business. Investor sentiment suffered further as the PNG government threatened to tear up an agreement that it previously agreed to, holding the Oil Search share price down as the company’s growth prospects sat in limbo.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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