Oil price drop hits Santos’ revenue
Australian LNG player Santos posted revenue of $786 million, 19% down on the $974 million in the corresponding quarter in 2014.
Santos recorded higher second quarter production and higher sales volumes, as well as significant reductions to both capital and operating expenditure.
Second quarter production of 14.3 million barrels of oil equivalent and sales volumes of 15.7 mmboe were 12% and 4% higher than the corresponding quarter, the company said in a statement.
Sales revenue were affected by the lower realised oil price, partially offset by higher domestic gas prices and a weaker Australian dollar.
Santos Managing Director and Chief Executive Officer David Knox said, “Year to date capital expenditure is 53% below 2014 levels and our production costs for the first half are tracking below guidance at A$14.0 per boe.”
He added that the company’s flagship GLNG project is progressing well as it moves toward first LNG around the end of the third quarter. All upstream facilities are commissioned and fully operational.
Santos reported that sales gas, ethane and sales gas to LNG production of 65.2 petajoules for the quarter was 17% higher than the corresponding quarter, reflecting a full quarter of PNG LNG production and increased Cooper production.
Total sales gas, ethane and LNG sales revenue increased 15% to $409 million for the quarter due to higher LNG volumes and higher domestic gas prices. The reduction in LNG sales revenues compared to the previous quarter reflects the 3-4 month lag to the oil price in LNG contracts.
LNG World News Staff; Image: Santos