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Oil Search has exercised a $US450 million ($A642 million) option to double its stake in a string of Alaskan exploration leases, while also affirming plans to sell off a portion of its first major venture outside Papua New Guinea.

The ASX-listed oil producer announced on Friday it would increase its interest in the Pikka Unit, Horseshoe Block and other exploration leases in Alaska after they rose in value following positive drilling and testing results.

The option was included in Oil Search’s initial $US400 million foray into Alaska’s Nanushuk and surrounding oil fields in 2017.

Oil Search said on Friday the purchase will be funded from existing corporate facilities, but it will also borrow $US300 million for extra flexibility until the planned sell-down of another portion of its Alaska interests is executed in mid-2020.

The company added it had entered an agreement with Spanish-based Repsol to align ownership interests across their shared Alaskan assets.

This will result in Oil Search retaining 51 per cent in the Pikka Unit and the Horseshoe Block, while purchasing a 51 per cent interest in the leases Repsol acquired in 2017, which are located immediately east of the Horseshoe area within the prospective Nanushuk trend.

This alignment will result in a net payment of $US64.3 million from Repsol to Oil Search.

Oil Search shares slipped 1.5 per cent to $A7.095 by 1145 AEST on Friday, in line with the ASX200 energy sector.

“We continue to see Alaska oil as the major swing factor for Oil Search with PNG LNG expansions reasonably well defined and in our view largely factored into the share price,” RBC Capital Markets oil and gas analyst Ben Wilson said.