Aug. 24 (Bloomberg) -- Oil Search Ltd., Papua New Guinea’s largest oil and gas producer, said first-half profit rose 49 percent, buoyed by higher oil prices and output gains. Net income climbed to $52.9 million in the six months ended June 30, compared with $35.6 million a year earlier, the company said today in a statement to the Australian stock exchange. Port Moresby-based Oil Search said it received an average price of $76.31 a barrel for its crude, a 47 percent increase. Sales grew to $276.6 million from $185.1 million in the first half of 2009, Oil Search said. Oil Search, partner in a $15 billion liquefied natural gas project operated by Exxon Mobil Corp., said the cost estimate for the Papua New Guinea development and the target date of 2014 for first fuel sales remain unchanged. The venture is among more than a dozen in Australia and Papua New Guinea targeting Asian demand for cleaner-burning fuel. The company expects to spend about $480 million on the project during the second half of 2010 and forecast total capital expenditure for the year at $1.26 billion. Oil Search fell 1.4 percent to A$5.79 by the market close in Sydney, compared with a 1.1 percent decline in the benchmark S&P/ASX 200 Index. The shares have dropped 5.6 percent this year, compared with a loss of about 10 percent for the benchmark. Oil Search is studying expansion opportunities and plans to give an update on the results of a “strategic review” at the end of 2010 and in early 2011, the oil producer said last month. Oil Search is seeking to build up reserves to support two more processing units at the Papua New Guinea gas project. Oil Search maintained its full-year production outlook of 7.2 million to 7.4 million barrels of oil equivalent. --Editors: John Viljoen, Alex Devine. To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net. To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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