ASX:OSH

Stock Analysis Report

Executive Summary

Oil Search Limited explores for, develops, and produces oil and gas properties in Papua New Guinea, the United States, and Australia.

Rewards

PE ratio (15.6x) is below the Australian market (18.8x)

Earnings are forecast to grow 11.95% per year

Earnings grew by 68.1% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

How has Oil Search's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OSH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.1%

OSH

-0.6%

AU Oil and Gas

1.4%

AU Market


1 Year Return

-20.2%

OSH

-7.3%

AU Oil and Gas

16.1%

AU Market

Return vs Industry: OSH underperformed the Australian Oil and Gas industry which returned -7.3% over the past year.

Return vs Market: OSH underperformed the Australian Market which returned 16.1% over the past year.


Shareholder returns

OSHIndustryMarket
7 Day1.1%-0.6%1.4%
30 Day-17.7%-8.7%0.5%
90 Day-12.3%-4.3%4.8%
1 Year-18.1%-20.2%-3.4%-7.3%21.2%16.1%
3 Year-5.3%-10.0%11.2%-0.1%37.0%18.6%
5 Year-14.8%-22.3%5.6%-13.2%51.7%17.8%

Price Volatility Vs. Market

How volatile is Oil Search's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Oil Search undervalued compared to its fair value and its price relative to the market?

15.62x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: OSH (A$6.47) is trading above our estimate of fair value (A$4.26)

Significantly Below Fair Value: OSH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: OSH is poor value based on its PE Ratio (15.6x) compared to the Oil and Gas industry average (8.8x).

PE vs Market: OSH is good value based on its PE Ratio (15.6x) compared to the Australian market (18.8x).


Price to Earnings Growth Ratio

PEG Ratio: OSH is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: OSH is overvalued based on its PB Ratio (1.3x) compared to the AU Oil and Gas industry average (1.2x).


Next Steps

Future Growth

How is Oil Search forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

12.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OSH's forecast earnings growth (12% per year) is above the savings rate (1.1%).

Earnings vs Market: OSH's earnings (12% per year) are forecast to grow faster than the Australian market (9.3% per year).

High Growth Earnings: OSH's earnings are forecast to grow, but not significantly.

Revenue vs Market: OSH's revenue (5% per year) is forecast to grow faster than the Australian market (4.1% per year).

High Growth Revenue: OSH's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OSH's Return on Equity is forecast to be low in 3 years time (8.2%).


Next Steps

Past Performance

How has Oil Search performed over the past 5 years?

9.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OSH has high quality earnings.

Growing Profit Margin: OSH's current net profit margins (24.2%) are higher than last year (19%).


Past Earnings Growth Analysis

Earnings Trend: OSH's earnings have grown by 9.7% per year over the past 5 years.

Accelerating Growth: OSH's earnings growth over the past year (68.1%) exceeds its 5-year average (9.7% per year).

Earnings vs Industry: OSH earnings growth over the past year (68.1%) exceeded the Oil and Gas industry 58.2%.


Return on Equity

High ROE: OSH's Return on Equity (8.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Oil Search's financial position?


Financial Position Analysis

Short Term Liabilities: OSH's short term assets ($855.8M) do not cover its short term liabilities ($1.2B).

Long Term Liabilities: OSH's short term assets ($855.8M) do not cover its long term liabilities ($5.1B).


Debt to Equity History and Analysis

Debt Level: OSH's debt to equity ratio (60.2%) is considered high.

Reducing Debt: OSH's debt to equity ratio has reduced from 85.8% to 60.2% over the past 5 years.

Debt Coverage: OSH's debt is well covered by operating cash flow (33%).

Interest Coverage: OSH's interest payments on its debt are well covered by EBIT (3.9x coverage).


Balance Sheet

Inventory Level: OSH has a high level of physical assets or inventory.

Debt Coverage by Assets: OSH's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Oil Search's current dividend yield, its reliability and sustainability?

3.11%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%2.3%markettop25%5.5%industryaverage4.1%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: OSH's dividend (3.11%) is higher than the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: OSH's dividend (3.11%) is low compared to the top 25% of dividend payers in the Australian market (5.5%).


Stability and Growth of Payments

Stable Dividend: OSH's dividend payments have been volatile in the past 10 years.

Growing Dividend: OSH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.5%), OSH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OSH's dividends in 3 years are forecast to be well covered by earnings (42.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.1yrs

Average management tenure


CEO

Peter Botten (64yo)

25.3yrs

Tenure

US$5,917,423

Compensation

Mr. Peter Robert Botten, AC, CBE, B.Sc., ARSM has been Managing Director of Oil Search Limited since October 28, 1994, overseeing its development into a major Australian Securities Exchange listed company. ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD5.92M) is above average for companies of similar size in the Australian market ($USD2.80M).

Compensation vs Earnings: Peter's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Peter Botten
MD & Executive Director25.3yrsUS$5.92m0.20% $20.1m
Stephen Gardiner
Chief Financial Officer7.3yrsUS$1.40m0.077% $7.6m
Michael Herrett
Executive General Manager of Human Resources - Health & Administration0yrsUS$1.10m0.014% $1.4m
Michael Drew
Group Secretary and Executive VP of Corporate & General Counsel6.1yrsUS$939.84k0.0036% $355.1k
Ian Munro
Executive General Manager of Gas0yrsUS$1.28m0.0061% $600.8k
Keiran Wulff
Executive VP & President of Alaska1.9yrsUS$1.91m0.011% $1.1m
Elizabeth White
Executive Vice President of Development0yrsUS$934.01k0.0068% $670.8k
Bart Lismont
Executive Vice President of Technology & Value Assurance0.6yrsno datano data
Ann Diamant
Senior Vice President of Investor Relations0yrsno datano data
Matthew Park
Vice President of Communications & Media0yrsno datano data

6.1yrs

Average Tenure

Experienced Management: OSH's management team is seasoned and experienced (6.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Peter Botten
MD & Executive Director25.3yrsUS$5.92m0.20% $20.1m
Susan Cunningham
Non-Executive Director1.9yrsUS$131.75kno data
Fiona Harris
Non-Executive Director3.1yrsUS$190.76k0.0042% $413.3k
Agu Kantsler
Non-Executive Director9.6yrsUS$182.99k0.0060% $591.9k
Eileen Doyle
Non-Executive Director4yrsUS$185.46k0.0047% $466.6k
Richard Lee
Chairman of the Board7yrsUS$384.87k0.013% $1.3m
Kostas Constantinou
Non-Executive Director17.8yrsUS$173.25k0.00066% $65.1k
Melchior Togolo
Non-Executive Director3.3yrsUS$173.82kno data
Bakheet Al Katheeri
Non-Executive Director1.9yrsUS$133.65kno data

4.0yrs

Average Tenure

64yo

Average Age

Experienced Board: OSH's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Oil Search Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Oil Search Limited
  • Ticker: OSH
  • Exchange: ASX
  • Founded: 1929
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: AU$9.865b
  • Shares outstanding: 1.52b
  • Website: https://www.oilsearch.com

Number of Employees


Location

  • Oil Search Limited
  • Harbourside East Building
  • Ground Floor
  • Port Moresby
  • Papua New Guinea

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OISH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
OISDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
OSHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
OSHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
OISH.YOTCPK (Pink Sheets LLC)ADR EACH REPR 10 ORD PGK0.10(BNY)USUSDNov 1992

Biography

Oil Search Limited explores for, develops, and produces oil and gas properties in Papua New Guinea, the United States, and Australia. The company operates through PNG Business Unit, Exploration, and Other segments. It is involved in the development, production, and sale of liquefied natural gas, crude oil, natural gas, condensate, naphtha, and other refined products; and power generation activities. As of December 31, 2018, the company’s proved and probable reserves, and contingent resources comprised 253.5 million barrels of oil and condensate; and 6,742.2 billion cubic feet of gas. Oil Search Limited was founded in 1929 and is based in Port Moresby, Papua New Guinea. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 10:36
End of Day Share Price2020/02/14 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.