Australia’s Santos revises guidance as Q1 production drops

Australian LNG player, Santos reported a slight drop in first-quarter production due to maintenance activities and production outage at the Papua New Guinea LNG project.

First quarter production reached 13.8 million barrels of oil equivalent (mmboe), 1.2 mmboe or 8 percent lower than the prior quarter due to planned maintenance at facilities in Moomba and in Queensland.

“Excluding these shutdowns, production would have been in line with the prior quarter,” Santos managing director and CEO, Kevin Gallagher said.

The company’s sales volumes also dropped for the same reasons as well as lower third-party sales volumes from the Gladstone LNG project due to  gas
purchases from QGC during the fourth quarter of 2017 and the cessation of a GLNG third-party gas supply contract.

Sales volumes were at 18.9 mmboe, down from 21.8 mmboe in the previous quarter. With the lower sales volumes, the sales revenues dipped compared to the previous quarter, reaching US$794 million compared to $861 million in the fourth quarter.

The shutdown of the PNG LNG project during the quarter is expected to reduce 2018 full-year production and sales volumes by approximately 2 mmboe.

The upper ends of production and sales volume guidance have been revised accordingly while the lower ends have been maintained. Santos expects the higher end sales volumes to reach 76 mmboe and production’s upper end guidance has been revised to 58 mmboe, while the lower ends remained at 72 and 55 mmboe, respectively.