Weaker oil prices and a fall in production have contributed to a slump in revenue for Oil Search.
But the oil and gas producer remains on track to meet its full year production forecasts, as it cuts costs to keep its balance sheet in a sound position.
Oil Search, which has a 30 per cent stake in the PNG LNG project in Papua New Guinea, said revenue fell 16 per cent to $US472.3 million ($A611.51 million) in the three months to March, compared to the previous quarter.
That reflected an eight per cent fall in LNG and gas revenues, and a 37 per cent drop in oil and condensate.
Oil Search has reviewed its business in light of weak global oil and gas prices but says the company's operational and financial position remains resilient.
"In light of the decline in oil price, we believe it is prudent to remove costs from our business and reinforce fiscal discipline to enhance profitability while ensuring we have sufficient financial capacity to pursue our growth opportunities," chief executive Peter Botten said.
It comes after the company revised its capital and operating cost budgets for 2015.
Oil Search's total production fell five per cent to 6.91 million barrels of oil equivalent in the March quarter, down from 7.24 mmboe in the December quarter.
The decline had been expected because of reduced production at its PNG LNG plant due to scheduled maintenance, the company said.
Production rates were fully restored by the end of the quarter and the company remains on track to meet its 2015 full year production guidance of 26-28 mmboe, Oil Search said.
The company made a net profit of $US353 million in 2014, up from $US206 million in 2013, as production nearly tripled and revenue more than doubled as the PNG LNG project ramped up.
CMC chief market economist Michael McCarthy said the 16 per cent revenue drop in revenue was not as bad as some market watchers expected.
"They did have more to sell, so the lower oil price is not good news for them," Mr McCarthy said.
But the company was in a transformation phase so the result was "pretty positive" as the ramp-up continued, he said.
Shares in Oil Search dropped one cent to $8.09.
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