Oil Search said its 2008 full-year production was expected to be within its previous forecast range of between 9 million and 9.5 million barrels of oil equivalent, despite the recent sale of its Middle East and North Africa assets.

Although the sale would reduce its 2008 output by about 0.5 million boe, good field performance and the acceleration of a well improvement programme was expected to offset the production lost, Managing Director Peter Botten said in a statement, Reuters reported.

The company said quarterly output of 2.12 million was down 4% from the previous quarter, bringing total production in the first half to 4.33 million boe.

Helped by the recent surge in crude oil prices, Oil Search said its sales revenue jumped 71% from the previous quarter to $294.2 million, bringing total revenue in the first six months to $466.8 million, a record for the company in its 79-year history.

Shares in Oil Search were down 1% at A$4.95 (US$4.82) by 0313 GMT, compared with a 0.87% gain in the broader S&P/ASX 200 Energy index.

Oil Search said the sale of its Middle East and North Africa assets to Kuwait Energy for $200 million plus working capital in April was expected to be completed in the third quarter and generate a post tax profit of about $130 million.

But exploration expenses were expected to increase about 7% compared to the first half of 2007, due to seismic and other exploration costs in Papua New Guinea, the company said.

Oil Search is a partner in ExxonMobil's proposed 6.3 million tonnes-per-year liquefied natural gas pproject in Papua New Guinea, which moved to a front-end engineering and design phase in May. The project, estimated to cost $11 billion, is targeting first deliveries by 2014.

Oil Search said it was considering its position regarding AGL Energy's planned sale of its stake in the LNG project, for which Oil Search and other venture partners have pre-emptive purchase rights

Published: 22 July 2008 03:13 GMT  | Last updated: 22 July 2008 06:39 GMT