News: OSH Oil Search Says To Raise A Total Of Up To About US$700 Million

April 7 (Reuters) - Oil Search Ltd (OSH) :

• TO RAISE A TOTAL OF UP TO APPROXIMATELY US$700 MILLION
• EQUITY RAISING WILL BE CONDUCTED AT AN OFFER PRICE OF A$2.10 PER SHARE
• EXTENDING MATURITY OF US$300 MILLION LOAN FACILITIES FROM 13 SEPT 2020 TO 30 JUNE 2021
• NORMAL PRODUCTION LEVELS HAVE BEEN MAINTAINED DURING Q1 OF 2020
• IN RESPONSE TO MARKET CONDITIONS CO EXTENDING MATURITY OF US$300 MILLION LOAN FACILITIES FROM 13 SEPTEMBER 2020 TO 30 JUNE 2021
• ACCELERATED PRO-RATA NON-RENOUNCEABLE ENTITLEMENT OFFER, INSTITUTIONAL PLACEMENT, OFFER TO ELIGIBLE PNG SHAREHOLDERS FOR CAPITAL RAISE
• SUSPENSION/DEFERRAL OF DISCRETIONARY ACTIVITIES WITHIN ITS CONTROL, RESULTING IN 40% CUT IN 2020 FORECAST INVESTMENT EXPENDITURE GUIDANCE
• RECONFIRMED ITS 2020 FULL YEAR PRODUCTION GUIDANCE OF 27.5 - 29.5 MMBOE, ASSUMING NO BUSINESS INTERRUPTION FROM COVID-19
• REDUCTION IN 2020 FORECAST INVESTMENT EXPENDITURE GUIDANCE, FROM US$710-845 MILLION TO US$440-530 MILLION
• FOLLOWING EQUITY RAISING, CO EXPECTED TO HAVE PRO-FORMA GEARING OF 28% AND AVAILABLE LIQUIDITY OF ABOUT US$1,835 MILLION
• EBITDAX IN Q1 OF 2020 HAS BENEFITED FROM STRONG REALISED PRICING
• TO DATE, NORMAL PRODUCTION LEVELS HAVE BEEN MAINTAINED, WITH NO DISRUPTIONS TO LIFTING SCHEDULES EXPERIENCED
• COMMENCED SYSTEMATIC REVIEW OF SUSTAINABLE COST REDUCTION INITIATIVES FOR BOTH OIL SEARCH OPERATED ASSETS AND CORPORATE OVERHEADS
• TARGETING AT LEAST A US$1-2/BOE REDUCTION IN PRODUCTION COSTS THROUGH REVIEW, PRIOR TO IMPLEMENTATION COSTS
• CONTINUE TO BE IN REGULAR DIALOGUE WITH PNG GOVERNMENT TO MINIMISE ANY DISRUPTION TO OPERATIONS
• 2020 Q1 PRODUCTION WAS 7.3 MMBOE
• PRIOR PRODUCTION COST GUIDANCE OF US$11- 12/BOE WILL BE UPDATED IN MID- 2020
• OIL SEARCH'S LARGEST SHAREHOLDER MUBADALA NOT PARTICIPATING IN EQUITY RAISING
• HAD PRELIMINARY DISCUSSIONS WITH LENDERS WHO INDICATED WILLINGNESS TO CONSIDER COVENANT WAIVERS, TO EXTENT THEY MAY BE REQUIRED
• EXECUTION OF PRELIMINARY COST REDUCTION MEASURES, START OF SYSTEMATIC REVIEW OF OPERATING COSTS TO BE IMPLEMENTED BY JUNE 2020
• PRELIMINARY COST REDUCTION MEASURES INCLUDE SALARY CUTS, HEADCOUNT REDUCTIONS IN SYDNEY, ANCHORAGE & DISCRETIONARY SPENDING CUTS