UPDATE 1-Oil Search says Q1 output falls, reviews '08 forecast

(Adds details, background)

PERTH, April 22 (Reuters) - Australian listed Papua New Guinea (PNG) oil and gas producer Oil Search Ltd (OSH.AX: Quote, Profile, Research, Stock Buzz), said on Tuesday its first-quarter output fell 3.3 percent from a year ago, and it was reviewing its full-year production forecast.

Quarterly output of 2.21 million barrels of oil equivalent (boe) fell 10.6 percent on the previous quarter, due to natural field decline and a shut down of two of its production facilities for repairs, Oil Search said in a statement.

"In light of the sale of the MENA assets and some modifications to the PNG drilling programme due to slower than anticipated drilling, Oil Search is currently reviewing its 2008 production forecast," Oil Search Managing Director Peter Botten said in a statement.

"Further guidance will be provided to the market when this work is complete."

Shares in Oil Search were down 5 percent at A$4.94 by 0209 GMT, compared with a 0.6 percent decline in the S&P/ASX 200 Energy index .

Earlier this month, Oil Search sold its Middle East and North African (MENA) assets for $200 million plus working capital to free up cash for a proposed liquefied natural gas (LNG) project in Papua New Guinea.

The company said it will refocus its Middle East and North African activities on the retained areas, which including acreage in Libya, Yemen, Tunisia and Kurdistan, all of which had "material upside potential".

Oil Search in February forecast 2008 output of 9.0-9.5 million boe, slightly below the 9.78 million boe produced in 2007, due to natural field decline.