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Santos Expects to Reach Production Guidance

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Australian oil and gas company Santos Ltd. remains on track to reach its production guidance for 2013 despite a series of issues affecting its performance at key operations.

The company outlined in its third quarter results that output for the year was likely to finish in the range of 52 to 55 million barrels of oil equivalent (MMboe), the lower end of guidance previously reported.

Santos explained this was primarily due to deferred oil and gas production from the Chim Sáo operation offshore Vietnam and deferred oil production from Fletcher Finucane in Western Australia. 

Despite the update on its full-year guidance, the company posted an 8 percent increase in production in the third quarter against the previous three-month period to 13.4 MMboe. However, gas production for the quarter fell by 5 percent on the corresponding period to 9.5 MMboe.

Santos reported that quarterly crude oil production increased by 15 percent on the previous quarter to 2.9 million barrels. The higher production was guided by a rise in output from Fletcher Finucane and the Cooper Basin in Australia.

Meanwhile, Santos has delivered record sales revenue during the third quarter on the back of its highest oil production in six years.

Santos reported sales revenue of more than $1 billion, a figure that was also boosted by strong oil prices and higher third party sales volumes.

Its average gas price for the September quarter was $5.98 a gigajoule, which was also a record. This price was driven by higher gas prices in Western Australia and Indonesia, along with higher liquefied natural gas (LNG) prices from Darwin in Australia’s Northern Territory.

David Knox, Santos managing director, said the record sales revenue demonstrated the performance of the existing business at the same time as the company continued to progress the delivery of new projects and future opportunities.

“Excellent progress continues to be made on our two major growth projects, with PNG LNG over 90 percent complete and GLNG (in Queensland) over 65 percent complete,” Knox said in a statement.

“Both projects remain on schedule and capital cost estimates remain unchanged.

“Our development projects, Dua and Peluang (in Asia), are also on track to deliver first oil and first gas respectively in the first half of 2014,” he said.

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