OSH - Oil Search

[jackson8]

hi kennas

have also been watching them since about 2000- 2002
almost bought into them at around 50c back then with intentions to write calls over them .........wish i had as like you say would have made a pretty good return

have just bought into them two months ago with same intentions and would like to pick up a few more ........only thing holding me off from buying is just all the uncertanty in the markets just now . crude is down again today and need a cystal ball to know what the future holds

dow sitting on a cliffs edge so may wait to see what the next few days have in store for us

 

[Shrewd Crude]

jackson-

i think it would be wise to say that nothing is written in concrete
when i look at some of the once were darlings such as aed and nxs it makes me realise that a fall from grace can happen very quickly , all it takes is one peice of bad news and not necessarily bad but unnerving for investors to flee in droves especially with present market conditions

i currently do hold some osh but what worries me are a few factors
1) the price of oil . what would be their bottom line before production costs are greater than returns.
2) declineing oilfeilds they hope to start lng production to pick up from the tail end of these and if production is delayed which lets face it happens all the time then cash flow could be affected
3) just the time period for this 5 years out , a lot can happen over that time frame

osh has seen a rapid growth in sp over last few years and i wonder if it is justified to continue that growth in the short to medium term given current circumstances

i dont want to be thought of as downramping but the share market can be very unforgiving at times

jackson,
final investment decision for PNG LNG is for later in 2009...
OSH have given every indication to the market that they will proceed... they have been selling African assets to fund their share of development costs...
I guess its just the slow steady derisking of this 'legacy' asset over time as production gets closer and closer...OSH is already bouncing off lows quickly...
they are proactive...
You cant even compare OSH to AED or NXS...
AED's problems were company specific (technical problems) that management did not know how to fix... OSH could have fixed it...
Oil Search are leaders for a reason... I have no doubt in my mind that this will progress smoothly...
When this takes off OSH will be trading around $20 bucks per share, based on tripled revenue estimates...
yeah there are some risks, as I said soverign risk is probably the biggest risk... but the expected return far outweighs the risks, so this is good risk return investment... my favourite big capped stock, and I dont usually like big capped stocks...

.^sc

 

[jackson8]

jackson,
final investment decision for PNG LNG is for later in 2009...
OSH have given every indication to the market that they will proceed... they have been selling African assets to fund their share of development costs...
I guess its just the slow steady derisking of this 'legacy' asset over time as production gets closer and closer...OSH is already bouncing off lows quickly...
they are proactive...
You cant even compare OSH to AED or NXS...
AED's problems were company specific (technical problems) that management did not know how to fix... OSH could have fixed it...
Oil Search are leaders for a reason... I have no doubt in my mind that this will progress smoothly...
When this takes off OSH will be trading around $20 bucks per share, based on tripled revenue estimates...
yeah there are some risks, as I said soverign risk is probably the biggest risk... but the expected return far outweighs the risks, so this is good risk return investment... my favourite big capped stock, and I dont usually like big capped stocks...

.^sc

shrewd crude

have taken your comments on board ........having had my fingers and all my toes burnt through both aed and nxs am a bit apprehensive . ......like i have said i do hold small quantity and maybe this time of weekness in crude prices may be a good time to pick up a few more.

 

[Shrewd Crude]

Hey jackson,
AED was just not experienced enough to deal with a big problem when it came up...
I held AED from $1.34 to 5 bucks, and sold out to buy NWE which had a royalty over the field...I went 80% all in on it...
I moved on NWE in a big way, but sold out when production problems were looming... I got very lucky, because it is always hard to sell stocks trading at a big discount at that time...
AED with Sinopec definately has a shot at geting back some of its lost value...
At that time paying over one dollar for a company was the first step I ever made from moving away from spec oilers...
Over the last 5 years it really did not matter where you put your oil dollars... companies were blowing up for no reason...
now it gets tricky...
Over the next year or two we will really see which companies are standouts because performance will be harder to achieve... no doubt made harder by falling oil prices...
ps:just some friendly advice--> always get out of an oil stock if there is material change to its projections... Or there is a shift away from the project you invested into it for...
good luck mate...hehehe is sounds so easy eah... this is a tricky sector...

.^sc

 

[agathos]

Oil Search

Hi everyone at ASF,

Greetings.
I have just looked through the STO thread and there was an interesting comment made by a fellow member about the share movement pattern of OSH and STO.

STO shot through the AUD$15 price and I thought if that is so, my shares in OSH (yes, I do hold OSH shares) would be up too if the similar share price pattern holds true.

YES! It does.

I have found out a few facts from their Annual 2008 Report, some points I would like to highlight here (please make your own decision to invest):

From my glean through of their Annual Report 2008, I gather:

1) They claim that company is in the best economic position in 8 year history (introduction of the Performance Summary by Peter BOTTEN)

2) Record NPAT of UD$240 million dollars, 70% higher than 2007;

3) PNG LNG project progress to final investment decision "Most robust greenfields projects in the region" – key decision in late 2009, first gas produced supposedly in 2013/2014. It seems there are good market fundamentals and there will be key market players ready to buy the products, particularly from Asia Pacific region. Most importantly, there is continuing support from PNG Government.

4) Strong cash balance with USD535 million cash. (Line of credit secured for US$435 at peak of financial crisis at good terms, demonstrating support for company).

5) Declare a final US$4 cents dividend per share, with a DRP program in place.

There is currently a group liquidity of US$955 million at end of 2008

Check this out – they say in the Annual Report 2008 that there is NO HEDGING in place in 2008
NO hedging – this means that any further UPGROWTH in the price of oil (POO) will have a POSITIVE impact on OSH share price.

As of end of 2008, 2P reserves was estimated @ 66.9 mmboe.
In 2009, OSH target for 8 to 8.3 MMBOE.


2009 budget will focus on:

a) The need to ensure the LNG project gets the maximum $$$ it deserves
b) A Balanced drilling approach to generate cash flow.
c) It's all about PRESERVING LIQUIDITY to ensure all exploration and development expenditure is funded from operating cash flow, to ensure the LNG project has $$$ towards viability


Key things to look out for in 2009:

1) 2Q 2009: Sign HOA, BCA,
1.1 2Q 2009: Commence early WORKS
1.2 2Q 2009: Contingent on BSA & HOA
1.3 3Q 2009: Receive EPC bids
1.4 3Q 2009: Finalize CAPEX

1.5 4Q 2009: Finalize Investment Decision

Beyond 2009:

1.6 2010 Commence Construction
1.7 Year 2013: First LNG Sales.

Just some informationto share with everyone.

Have a great weekend and Happy Labor Day to everyone from Western OZ.

agathos.

 

[oldblue]

Re: Oil Search

Yes, a lot of reasons to be optimistic about the medium/longer term outlook for OSH.

A couple of points though.
STO is still seen to be a possible takeover prospect since the shareholding cap was removed last November. I don't think OSH has this "quality" but who knows in future?
Being unhedged has its pluses and minuses, eg those such as BPT which have a proportion of production hedged are receiving much better than spot returns for that product at present.

Disc: Former holder of both OSH and STO, currently holding a few BPT.

 

[basilio]

Oil Search does look like the goods. The LNG plant in New Guinea is a huge company making project. Exxon as a partner ensures certainty of completion (IMO) and having the PNG government as a major partner also improves the prospects.

Energy supplies will be critical in the near future. Peak Oil is here and its only the immediate effects of the current recession/depression that is keeping prices low. Another couple of years of oil depletion in Mexico, Norway etc will see prices soar.

There is a potential for a takeover of OSH. I think it would be a real mistake to allow this to happen because the long term value of the project to shareholders would, I believe, be far more profitable than a short term cash grab. (IMO) The chines would certainly be looking for such opportunities.

At the very least OSH is well priced at $5.00

 

[eddyeagle]

Saw this article today:


PNG LNG Greenlighted
December 09 2009 - Australasian Investment Review – (AIR)


The $US15 billion ($A16.46 billion) liquefied natural gas (LNG) project in Papua New Guinea has been given the go-ahead, subject to finalising sales agreements and finance, both of which won't be a concern.
The PNG LNG project is a joint venture led by a subsidiary of energy giant Exxon Mobil, with several partners, including Santos and Oil Search in Australia.


ExxonMobil will own 33.2%, Oil Search, 29%, the PNG Government 16.2% and Santos 13.2%.

The project, which will produce 6.6 million tonnes a year of LNG from late 2013 or early 2014, will be the largest private investment in PNG and is expected to contribute more than $30 billion to the nation's economy over the life of the project.

The project will develop gas fields in PNG's Highlands and Western Province and transport the gas via pipeline to an LNG facility near Port Moresby for shipment to customers, mostly in Asia.

It's the 5th LNG project in the Australasian region to be given the OK, or to be in production.

The first was the North West Shelf in WA where the Woodside led group is examining plans to extend its life by another two decades, at a cost of $5 billion or more.

There's Pluto, the big project from Woodside, the huge $43 billion Gorgon deal and the Bayu-Undan producing project which has its LNG plant near Darwin.

As well, the news comes only three days after Chevron and Tokyo Electric Power signed a heads of agreement on a huge LNG contract that could be worth $A90 billion for the Wheatstone project offshore the Pilbara coast in Western Australia.

Chevron said yesterday it expects to sign a further sales agreement with a major Korean buyer early in 2010.

Besides Oil Search and Santos Japan's Nippon Oil, the PNG government and a trustee to represent landowners affected by the project, are in the project that will be led by ExxonMobil.

A final investment decision was forecast to come by yesterday and it duly came in an announcement from an Exxon subsidiary called Exxon Highlands.



"Exxon Mobil Corporation announced today that the co-venturers have agreed to proceed with the development of the Papua New Guinea (PNG) liquefied natural gas (LNG) project, pending completion of sales and purchase agreements with LNG buyers and finalization of financing arrangements with lenders.
"At a ceremony at the PNG National Parliament House in Port Moresby, Peter Graham, managing director of Esso Highlands Limited, an ExxonMobil subsidiary, announced that pending completion of these sales and financing arrangements, significant project activity will commence in 2010. Esso Highlands is the operator of the project.

“With global demand for LNG forecast to nearly triple by 2030, the PNG LNG Project will be an important supply source to meet this future demand, particularly for the economies in the fast growing Asia Pacific region,” said Neil Duffin, president of ExxonMobil Development Company.

“The supply of cleaner-burning natural gas will also be critical in helping reduce global emissions.

"The co-venturer approval of the PNG LNG Project is a significant milestone.

"We look forward to applying our world-class execution capabilities and continuing to work together cooperatively with the PNG government to bring this resource to production.”

Oil Search CEO, Peter Botten said in a statement that the decision to move ahead with the PNG LNG Project will "transform Oil Search into a major participant in a world scale Liquefied Natural Gas (LNG) project.

"PNG LNG represents a long term legacy project which will add over 19 million barrels of oil equivalent to our annual production and result in approximately a nine-fold increase in our booked oil and gas reserves.

"The impact on PNG is no less significant.

"The development of this Project represents an opportunity to fundamentally change the outlook of the PNG economy and its people. When the Project commences production, the country’s Gross Domestic Product will more than double and export revenues will triple."

He said significant project activity is scheduled to commence in 2010, with the award of key Execution, Procurement and Construction contracts due to be announced shortly.

"While there will no doubt be many challenges, the PNG LNG partners are fully aligned on bringing this Project into production in late 2013/early 2014, with continued strong support from the PNG Government."

Buyers of gas from the project already are Japan's Tokyo Electric Power and Osaka Gas, Taiwan's CPC Corp and China's Sinopec Corp.

 

[Party Marty]

Does anyone have any thoughts on how much lower this stock will go?

 

[LouisCo1]

Getting a tad tired of waiting myself...

I know there was some drama in PNG with the LNG project, where work has been stopped on some projects. But as far as I know it
- wasn't crucial
- has not escalated
- is nothing exceptional as far as PNG politics are concerned. OSH has been dealing with this sort of thing for years. Maybe Exxon should make more use of OSH local know-how.

 

[Party Marty]

I'm getting close to my stop loss - considering selling before I reach it. Selling now will leave me with a 5% profit.

 

[LouisCo1]

I'm getting close to my stop loss - considering selling before I reach it. Selling now will leave me with a 5% profit.

Trust you did not sell out? Seems to be heading in the right direction again!

 

[pixel]

I'm getting close to my stop loss - considering selling before I reach it. Selling now will leave me with a 5% profit.

I hope you didn't sell too early and/or remembered to buy back at the Low(s).



I find it always amazing to see, how little is said about large-cap stocks that offer reliable swings, whereas tiddlers get all the attention on share Forums...
OSH suffered the latest sell-off into EOFY, but has since turned the corner and broken back into the rising channel - albeit only just.



I saw value at around $6.50 and started to accumulate along the new trend.
Current stop Close Below $6.65.

 

[polpak]

Looks like more interest in OSH at moment.

SPP requires money be paid to be on the SPP books before close of business Fri, 9 May, 2014.


IF taking the SIP up and using BPay best to pay before close Thursday - if not before, or risk miss out being late.


Expect all bids satisfied rather than reduced take up, mainly as big "professional" holders had their chance, this SPP limited offer enables smaller % holders to increase perhaps maintain smaller % holdings.

 

[greggles]

Oil Search 12 month chart compared with the Amex Oil Index (XOI) during the same period. Reasonably close correlation.

 

[rnr]

Looks as though it's setting up to break out closer to the ATH!

 

[sptrawler]

Oil search, struggling with current oil prices, $1bn capital raising?
Now that is serious money.
Current price $2.73

 

[rederob]

Oil Search’s cash flow break-even for 2020 (comprising operating and core corporate costs, sustaining capex, cash interest expense and scheduled PNG LNG debt repayments) is currently in the range of US$32-33 per barrel of oil equivalent (boe).
The cost reduction initiatives planned for the remainder of 2020 are roughly in the order of $300m, so are expected to lower the break-even (excluding the impact of one-off restructuring costs which as yet are unquantified).

 

[xen88]

Is oil search a buy at the moment? Will it rise in the future?

 

[The Triangle]

Is oil search a buy at the moment? Will it rise in the future?

Who knows! It's a worth doing research on at the moment.

Oil search average realized price for oil was about $63 US. Production for this year is going to be about the same as last year (25-30mmboe). Debt is around 3.5 billion. Dividend 200 million. Throw in a workforce that is hardly going to be happy (pay cuts, redundancy, cancelled projects and capex), low oil demand, corona virus, and I'm personally happy to sit on the sideline - especially at a valuation of $2.83 a share. Cap rise was absolutely needed.