Oil Search has launched an equity raising initiative to help the company survive the current oil price crash.
The company is asking investors for $1.16 billion with the equity raising to be conducted at an offer price of $2.10 per share – a 23.1 per cent discount on its previous closing price.
At the end of March, Oil Search cut approximately 100 jobs from its offices in Sydney and Anchorage, Alaska, and the company suspended or deferred all discretionary activities within its control, resulting in a reduction of around 40 per cent to its 2020 forecast investment expenditure.
Oil Search Managing Director Keiran Wulff said the rapid decline in oil prices and the COVID-19 pandemic had forced the company to act decisively.
“At this difficult time, our highest priority is the health and safety of our personnel and the communities in which we operate,” he said.
“Our capital preservation measures, together with the equity raising are intended to ensure that Oil Search can withstand a prolonged period of lower oil prices.
“Oil Search believes it is well positioned to deliver on its world class growth projects in Papua New Guinea and Alaska when market conditions improve.”
The company’s board and executive team have also taken a 20 pe cent salary reduction for the next six months and Mr Wulff said the company was in regular dialogue with the PNG Government to ensure disruptions to those operations was minimal.
For more information visit the Oil Search website.
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