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By Bloomberg

Oil Search Ltd., Papua New Guinea’s biggest energy producer, will cut spending and expects to write down the value of its assets by as much as $200 million as crude tumbles.

The Port Moresby-based company will also review its investment priorities and operating costs as oil prices have slumped to an almost six-year low, it said today in a statement.

Oil has extended last year’s fall as U.S. production increases and the Organization of Petroleum Exporting Countries resists calls to cut supply. Oil Search is at risk of having its credit rating cut if crude prices stay at about $70 a barrel or below, according to a Sanford C. Bernstein & Co. report on Jan. 28.

“The company remains resilient and well positioned to weather the lower oil price environment, with the majority of our production portfolio profitable at current oil prices,” Managing Director Peter Botten said in the statement.

Oil Search fell 1.2 percent in Sydney today, extending its decline this year to 2.4 percent.

It received an average of $73.64 a barrel for oil and condensate in the three months to Dec. 31, a decline of 27 percent on the previous three months, it said.

Brent for March settlement slipped $1.13, or 2.3 percent, to end the session yesterday at $48.47 a barrel on the London- based ICE Futures Europe exchange.

Sales Gain

Sales in the quarter more than doubled to $562.1 million, after the 2014 start of its liquefied natural gas project in Papua New Guinea. That compares with an estimate of $533 million from JPMorgan Chase & Co.

Production rose fourfold to 7.24 million barrels of oil equivalent from 1.8 million barrels, it said in the statement. JPMorgan expected output of 7.2 million barrels.

It expects 2015 output will be in the range of 25 million barrels to 28 million barrels.

An impairment review in response to lower oil prices is continuing and will probably see Oil Search book a charge of between $150 million to $200 million on exploration licenses in Papua New Guinea and some Middle East and North African assets.

A decision on the scale of planned cuts to capital expenditure in 2015 will be announced next month, the producer said.