Oil Search plans to raise $US700 million ($1.160 billion) to secure additional financial strength as it manages a challenging market environment.
The company has launched an entitlement offer, an institutional placement and an offer to eligible Papua New Guinea shareholders to raise the funds.
Oil Search reported that the proceeds raised would be used to strengthen its balance sheet and increase liquidity, so that it can withstand a prolonged period of low oil prices.
However, Oil Search has reassured the market that it is well-positioned to deliver its world-class growth projects in PNG and Alaska when market conditions improve.
In response to the difficult environment, the company has taken several steps, including the suspension of discretionary activities within its control, resulting in a 40 per cent reduction of its 2020 forecast investment expenditure guidance.
The company has also executed a preliminary cost reduction measure and commenced a systematic review of operating costs to be implemented by June.
To protect it from the impact of COVID-19, Oil Search has implemented business continuity plans and amended work practices.
Oil Search expects that its production levels will be maintained during the first quarter of 2020, with production levels at 7.3 mmboe, comprising 6.3 mmboe for PNG LNG.
The company has reconfirmed its 2020 full year production guidance of 27.5-29.5 mmboe, assuming no business interruption from COVID-19.
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