Oil Seach’s $1B windfall

Oil Seach’s $1B PNG LNG windfall
Friday, 6 February 2015
OIL Search will receive over $A1 billion from the $US19 billion PNG LNG project following ExxonMobil’s announcement this morning that the project has achieved financial completion.
Oil Search will receive more than $US700 million ($A893.62 million) in the project’s first distribution to co-venturers, which represents the Australian company’s share of cash flow, net of operating costs and the funding of debt service reserve accounts generated by PNG LNG since it came on stream in the first half of 2014.
Oil Search managing director Peter Botten said an additional $US107 million of cash currently held in escrow by Oil Search to support its project lender obligations during the construction phase will also be released and the completion guarantee provided to PNG LNG’s lenders will be terminated.
“The cash released will be used to help fund our growth activities, in particular, LNG expansion and development, which remains attractive based on the current oil price outlook,” Botten said.
All of the financial completion tests set forth in the project’s financing arrangements have been achieved.
“This is an important milestone in the project’s history. We shipped our first LNG cargo months ahead of schedule, and have now achieved financial completion,” ExxonMobil PNG Limited managing director Andrew Barry said.
“With the successful achievement of this important milestone, completion guarantees will be released, loan repayments will commence, and co-venture distributions will be permitted according to the terms of the financing agreements.”
Financing for the project was provided by a consortium of banks and export credit agencies.
The PNG LNG Project has now shipped 65 LNG cargoes to its customers.