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Production Outages Hit Santos Revenues

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SYDNEY - Australia's Santos Ltd. Friday reported a 5% fall in first-quarter revenue after production was hampered by outages including planned maintenance work on a floating oil production vessel offshore Western Australia state. 

Revenue for the three months through March of 713 million Australian dollars (US$733.7 million) compared to A$754 million a year earlier. 

Total oil and gas production slipped 2% to 12.1 million barrels of oil equivalent after the Mutineer-Exeter floating production, storage and offloading vessel was docked for maintenance. The work contributed to a 19% fall in oil production during the quarter. 

Santos said revenue was also hurt by lower third-party natural gas sales. Third party gas is sourced from rival producers then sold to customers by Santos. The fall could partly be pinned on trouble at supplier Nexus Energy Ltd.'s Longtom project offshore Victoria state, which has been plagued by technical glitches. 

Santos achieved an average price for its natural gas of A$5.43 per gigajoule over the quarter, which it said was a record. Australian east coast natural gas prices are being driven higher ahead of a spike in demand expected from three giant gas-export projects in Queensland state due to go live from 2015. 

Adelaide-based Santos said the US$18.5 billion GLNG liquefied natural gas project is more than 50% complete and remains on track to ship its first cargo in 2015. The US$19 billion PNG LNG project in Papua New Guinea, operated by ExxonMobil Corp. and which counts Santos as a minority shareholder, if over 80% complete. 

Santos maintained its annual output guidance of 53 million to 57 million barrels of oil equivalent.

Copyright (c) 2012 Dow Jones & Company, Inc.

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