Oil and gas producer Oil Search expects to spend big this year, after returning to profit, with the bulk going on exploration and evaluation projects in Papua New Guinea.
Oil Search anticipates spending about $US250 million to $US300 million ($A325.8 million-$A391 million) on exploration and evaluation in 2017, part of its forecast capital costs of $US360-$US460 million. It outlaid $US217.6 million in capital costs in 2016.
Managing director Peter Botten says 2017 is shaping up to be "very busy" with development of PNG LNG expansion projects.
A recent gas discovery in Muruk in PNG has further increased options for development, particularly given its proximity to existing infrastructure.
"The Muruk discovery has significantly reduced the uncertainty of a number of leads and prospects on-trend with Muruk, which will be matured further during 2017 and beyond," Mr Botten said on Tuesday.
Oil Search swung to a net profit of $US89.8 million in 2016, thanks to a three per cent rise in oil and gas production to 30.24 million barrels of oil equivalent (Mboe) and a six per cent lift in sales to 30.59 Mboe.
It also cut unit production costs by 16 per cent to $US8.50 per boe.
The profit also included $US18.7 million, after costs, from a break fee it received from ExxonMobil after losing its bidding war with the energy giant over InterOil.
The 2016 result compares with a net loss of $US39.4 million in 2015.
Excluding one-off items, Oil Search's 2016 core profit tumbled to $US106.7 million in the 12 months to December 31, from $US359.9 million a year earlier, hurt by lower oil and gas prices.
Oil Search also reaffirmed its 2017 production guidance, with output forecast to come in between 28.5 to 30.5 Mboe.
Oil Search will pay a final dividend of US2.5 cents a share, down from US4 cents a year earlier. That takes its total 2016 dividend to US3.5 cents, down sharply from US10 cents in 2015.
OIL SEARCH SALES HIT BY LOWER OIL AND GAS PRICES
*Swung to a full-year net profit of $US89.8m from a loss of $US39.4m
*Revenue dropped 22pct to $US1.23 billion
*Final dividend of US2.5 cents, down from US4 cents
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