Santos' Sales Revenue Falls to $578.5M in 2Q 2015, Down 19% YOY

Santos Ltd. posted sales revenue of $578.50 million (AUD 786 million) in the second quarter of 2015 (2Q 2015), 19 percent below last year's $716.86 million (AUD 974 million), with the decline attributed to lower oil prices but this was partially offset by higher domestic gas price and a weaker Australian dollar, the Australia-based firm said in its quarterly report Friday.

Production in 2Q 2015 increased 12 percent to 14.3 million barrels of oil equivalent (MMboe), compared to 12.8 MMboe in the previous year although Santos kept unchanged its 2015 production guidance at 57-64 MMboe.

In a move reflecting the industry downtrend,  Santos trimmed its capital expenditure to $269.38 million (AUD 366 million) during the quarter, down 65 percent compared to $766.91 million (AUD 1.042 billion) in 2Q 2014.

"Santos is taking positive steps to strengthen the company’s operating position in the lower oil price environment. Year to date capital expenditure is 53 percent below 2014 levels and our production costs for the first half are tracking below guidance at $10.30 (AUD14.0) per boe,” Santos Managing Director and CEO David Knox said in the press release.

Knox added that he was pleased with Santos's production growth and the progress the company had made on taking costs out of the business.

Turning to development projects, Santos reported that that $18.5 billion GLNG Project in Queensland, Australia is on track and within budget, with first liquefied natural gas (LNG) expected around the end of the third quarter of 2015.

The intial upstream component of the GLNG project was completed during 2Q 2015 with the final handover of Roma Hub 2 from commissioning to operations. All hubs are commissioned and operational, and the upstream facilities are supplying commissioning gas to the LNG plant on Curtis Island via the 261-mile (420-kilometer) gas transmission pipeline. Meanwhile work continues to progress on the LNG plant on Curtis Island and construction of the LNG loading jetty is complete.

“Our flagship GLNG project is progressing well as we move toward first LNG around the end of the third quarter. All upstream facilities are commissioned and fully operational, and we are making excellent progress on Curtis Island,” Knox commented.

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