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Oil Search HY profit doubles to $239m

Oil Search managing director Peter Botten says talks wtih PNG have been "constructive"

Oil Search says its first-half profit has more than doubled but uncertainty over a crucial natural gas agreement in Papua New Guinea is weighing on the oil and gas producer.

The company reported a $US161.9 million ($A239 million) profit after tax for the six months to June 30 and boosted its dividend from 2.7 to five US cents a share as it rebounded from the PNG earthquake in February 2018.

But managing director Peter Botten on Tuesday would not go into details with investors about talks with PNG on renegotiating the crucial Papua LNG Gas Agreement, saying only that they have been "constructive".

If the talks in Singapore drag on past this month, it could delay the entire $16 billion project as bids expire for Front End Engineering and Design (FEED) work.

The gas agreement sets out royalties under a $16 billion plan to build a third LNG processing plan in PNG and double the country's gas exports.

The pact was signed April after 12 months of negotiations but helped lead to the ouster of PNG prime minister Peter O'Neill after critics said it was too generous to Total, ExxonMobil and Oil Search, the partners in Papua LNG.

Petroleum Minister Kerenga Kua has given mixed signals about what the government is seeking, at first indicating it would back the original agreement in principle then warning the talks could end "disastrously".

Mr Botten acknowledged the uncertainty had hurt Oil Search's share price but said it would not be productive to go into details about the talks, which began late last week.

At 1309 AEST, Oil Search shares were up five cents, or 0.8 per cent, to $6.55.

He said testing had confirmed Oil Search had made a significant gas discovery at its Muruk 2 exploration well in the PNG highlands.

It was working to develop oil fields in Alaska's North Slope it acquired in early 2018.

Oil Search said for the half-year its sales volume was up 37 per cent to 13.4 million barrels of oil equivalent (mmboe) and its revenue was up 39 per cent to $US776.9 million.

OIL SEARCH

* Half-year revenue up 39 pct to $US776.9 million ($A1.1b).

* Net profit after tax up 105 pct to $US161.9 million ($A239m)

* Interim dividend of five US cents, up from two cents a year ago.