Santos Sales Revenue Hits Record High, Australia

Santos announced record sales revenue of over $1 billion for the third quarter of 2013. The record result was driven by the company’s highest oil production in six years, strong oil prices and higher third party sales volumes.

Record quarterly sales revenue and strong progress on growth projects

• Third quarter production of 13.4 million barrels of oil equivalent (mmboe) was 8% higher than the second quarter of 2013.
• Gas production of 55.3 PJ (9.5 mmboe) was 5% lower than the corresponding period, with higher production from Darwin LNG offset by lower production in Bangladesh and the Otway Basin.
• The average gas price of $5.98/GJ for the September quarter was a record and 10% higher than the corresponding quarter, driven by higher gas prices in Western Australia and Indonesia, and higher LNG prices from Darwin LNG.
• Quarterly crude oil production of 2.9 million barrels was 15% higher than the previous quarter, with higher production from Fletcher Finucane and the Cooper Basin.  The average oil price for the quarter was A$127 per barrel.
• 2013 full-year production is expected to be at the low end of the previously stated guidance range of
  52 to 55 mmboe. Refer page 2 for further details.

Key activities during the period

• Major growth projects on track: PNG LNG is over 90% complete and on track for first LNG in the second half of 2014 and GLNG is over 65% complete and on track for first LNG in 2015.  Capital cost estimates for both projects are unchanged.
• Strong construction progress across all aspects of the GLNG project, with the 200th CSG well for the year spudded in early October, the first Fairview wells connected to the new water processing infrastructure, completion of the clearing and grading of the mainland pipeline right-of-way and the raising of the second LNG tank roof.
• Completion of the Antonov heavy lift aircraft operations into Komo airfield at PNG LNG and introduction of commissioning gas to the LNG plant.
• Acquisition of a 50% interest in the Ande Ande Lumut oil field offshore Indonesia and 30% interests in two exploration permits in Papua New Guinea.

Santos Managing Director and Chief Executive Officer David Knox said that record sales revenue of over $1 billion demonstrated the performance of the existing business at the same time as the company continued to progress the delivery of new projects and create opportunities for the future.

“Excellent progress continues to be made on our two major growth projects, with PNG LNG over 90% complete and GLNG over 65% complete. Both projects remain on schedule and capital cost estimates remain unchanged.”

“We also continue to execute our strategy of focused growth in Asia, with the acquisition of an interest in the Ande Ande Lumut oil field offshore Indonesia and interests in exploration permits in Papua New Guinea. Our development projects, Dua and Peluang, are also on track to deliver first oil and first gas respectively in the first half of 2014.”

“Exploration in the Browse Basin and in the Cooper Basin unconventional program continues and we are seeking further success with the exploration drill-bit in the fourth quarter,” Knox said.

2013 Guidance

2013 full-year production is expected to be at the low end of the previously stated guidance range of 52 to 55 mmboe, primarily due to:

– Deferred oil and gas production from Chim Sáo due to the shutdown of the gas export pipeline in late August. Oil production has been curtailed to minimise flaring and gas export is expected to resume in the December quarter. –

Deferred oil production from Fletcher Finucane due to issues with water separation systems on the FPSO curtailing oil production.

[mappress]

LNG World News Staff, October 18, 2013; Image: Santos