It would appear Mr Market did not like the following, IMHO:
1. A 12% fall in first quarter production at its Papua New Guinea oilfields, as a result of natural field decline and a plant shutdown (12% being lower than in the fourth quarter of 2007). I did not like it either nor expected it!
The shutdown was due to essential maintenance work.
2. Sales revenue for the quarter was US$160.3 million ($170.5 million), down 30% from the December quarter (but up 39% from the same quarter of 2007). Again, I did not like it either nor was I expecting such a large drop between quarters.
Due to timing of cargoes, oil sales were some 270,000 barrels below oil production available for sale.
The consequent higher inventory position is expected to be largely unwound by mid-year, hopefully into a higher oil price environment.
3. No further details on the fiscal terms of the proposed PNG LNG Project agreement were provided. Guess we, along with Mr Market, will have to wait until early May.
4. Due to the uncertainty of the production forecast (currently 9 to 9.5 mmboe for 2008 but now expected to be lower), we can expect volatility in the share price until OSH releases the new production forecast/update. Trading opportunities??
Cheers
OSH Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
