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Oct 26 (Reuters) - Papua New Guinea-focused Oil Search Ltd (OSH) said on Tuesday its third-quarter operating revenue more than doubled, as a global energy crunch lifted prices of oil and liquefied natural gas (LNG).
Like its global peers, the Australia-listed company has benefited from crude and LNG prices surging in recent months, as economies reopening from coronavirus-related lockdowns power fuel demand.
"Both LNG and oil markets remain strong, with spot LNG markets continuing to exhibit high volatility and record highs," said Acting CEO Peter Fredricson in a statement.
The company sealed a deal last month with rival Santos (STO) for a proposed merger to create a global top 20 oil and gas company, which shareholders are set to vote on later this year.
Operating revenue was $408.8 million for the three months ended Sept. 30, up from $189 million a year earlier. That compared with forecasts from RBC Capital Markets and UBS of $375 million and $425 million, respectively.
The strong commodity prices helped revenue grow despite a 5.5% drop in quarterly production to 6.9 million barrels of oil equivalent, which was in line with forecasts.
Oil Search trimmed its 2021 production estimate at its Hides gas-to-electricity project to between 0 and 0.2 mmboe from a prior estimate of 0 to 1 mmboe, due to an ongoing shut-in of the Porgera gold mine in Papua New Guinea, supplied by Hides.
It said ExxonMobil Corp XOM.N , operator of its key PNG LNG project, and the PNG government aim to complete a gas agreement for the P'nyang project before the end of the calendar year.
Exxon and its partners had earlier intended to develop P'nyang to feed a new processing unit, or train, at the two train PNG LNG plant.
But talks on the P'nyang project fell apart in late 2019 amid a dispute between the PNG government and Exxon.
