Production gains soften LNG price plunge for Santos
A GAIN in production has softened the impact of lower LNG prices for Santos, which reported sales in the June quarter of $786 million, down 19 per cent from a year earlier.
Output in the quarter was 12 per cent higher than in the same period last year, at 14.3 million barrels of oil equivalent, and edged up two per cent from the March quarter, Brisbane Times reports.
Production was boosted by a full quarter of output from the new Papua New Guinea LNG project, in which Santos has a stake.
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Santos announced significant reductions to capital and operating expenditure in its latest activities report, released on Friday.
Sales revenue fell 19 per cent on the corresponding quarter, affected by the lower realised oil price, partially offset by higher domestic gas prices and a weaker Australian dollar, the company reported.
Managing director and chief executive officer David Knox said he was pleased with the production growth and the progress the company had made on taking costs out of the business.
"Santos is taking positive steps to strengthen the company's operating position in the lower oil price environment," Mr Knox said.
"Year to date capital expenditure is 53 per cent below 2014 levels and our production costs for the first half are tracking below guidance.
"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."