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Santos Hits 1Q Production of 14.0 MMBOE; Talks LNG Outlook

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   |    Friday,April 17,2015

Santos today announced higher first quarter production, higher sales and significant progress at the GLNG project.

First quarter production of 14 million barrels of oil equivalent (mmboe) and sales volumes of 15.2 mmboe were 15% and 10% higher respectively than the corresponding quarter.

Santos Managing Director and Chief Executive Officer David Knox said that Santos had delivered a sound start to 2015, including higher production, excellent progress on GLNG commissioning and exploration success offshore Malaysia: "I am pleased to report strong progress at GLNG, where first LNG is now expected around the end of the third quarter, within the US$18.5 billion budget.

"First gas was introduced into the LNG plant in early March and the first two gas turbine generators which provide electrical power supply to the plant are running."

Sales revenue was 10% lower primarily due to the fall in global oil prices, partially offset by stronger domestic gas prices and a weaker Australian dollar.

Knox said the company had taken prompt and decisive actions to respond to the current low oil price environment: "First quarter capital expenditure was 40% lower than last year, and we continue to make solid inroads towards reducing production costs per barrel across the business."

During the quarter, Santos also announced a significant oil discovery at the Bestari-1 exploration well offshore Malaysia. The well encountered 67 metres of net oil pay in multiple sand packages within the primary Miocene age formation. The oil bearing sands are of high quality with good porosity and permeability.

All guidance for 2015 is maintained.

Sales gas, ethane and gas to LNG production of 63.2 petajoules for the quarter was 25% higher than the corresponding quarter, reflecting a full quarter of PNG LNG production. Total sales gas, ethane and LNG sales revenue jumped 78% to $520 million for the quarter.

Quarterly crude oil production of 2.0 million barrels was 22% lower than the previous quarter, primarily due to scheduled dry dock maintenance of the Mutineer-Exeter/Fletcher Finucane FPSO during the first quarter. The average oil price for the quarter was A$72 per barrel, 22% lower than the previous quarter, reflecting lower global oil prices partially offset by a weaker Australian dollar. Total crude oil sales revenue of $223 million for the quarter was 42% lower than the previous quarter reflecting lower oil prices and sales volumes.