Oil Search's second quarter operating revenue jumped 42 per cent from the preceding quarter because of higher oil sales and prices.

Operating revenue for the three months to June was $US217.8 million ($200 million), Port Moresby-based Oil Search said in a statement this morning.

The company's shares gained 15 cents, or 2.2 per cent, to $6.88 in morning trade.

The average realised oil price during the second quarter was $US123.28 per barrel, 13.5 per cent higher than the quarter before. Total second quarter oil sales came to 1.6 million barrels, from 1.23 million in the first quarter.

Oil Search's total oil and gas production in the second quarter was 1.77 million barrels of oil equivalent, similar to the first quarter production of 1.79mmboe.

Oil Search chief executive Peter Botten said the PNG LNG (liquified natural gas) project had achieved key milestones, including the ground-breaking of the construction phase and the first onshore pipeline weld being completed.

He said PNG LNG's operator ExxonMobil had said it was making good progress towards the planned start-up window of 2014.On the production results, Mr Botten said it was a pleasing performance.

''Natural decline in Kutubu and Moran (was) largely offset by recent development activity and field optimisation,'' he said.

Oil Search said cash operating costs for the first half would be at the lower end of the guidance of $US19 to $US21 per barrel of oil equivalent. The company said the full-year production forecast was unchanged at 6.2 to 6.7 mmboe.

AAP