US$1.1Bill loss for Gladstone gas giant
ENERGY giant Santos spent US$18.5 billion building its Gladstone Liquefied Natural Gas plant on Curtis Island and after 10 months of exporting gas it has a reported a US$ 1.1 billion loss for the first half of 2016.
The company has previously written of US$1.05 billion from the value of the plant but that figure isn't included in the recent net loss.
The leaking of money for Santos comes as low oil prices have brought down the price of the long term contracts the company has with buyers.
The contracts lose value when the price drops because they are linked to the price of oil. The price of LNG has dropped by 42% in the first half of the year, oil has dropped by 29%.
The new managing director and chief executive officer Kevin Gallagher said when he joined in February his first priority was to restructure the company to survive with the low oil price.
The restructuring has saved Santos US$35 million by reducing its workforce by 253 people.
"Our goal is to be free cash flow breakeven at between US$35 to US$40 per barrel,” he said as the oil price currently sits at US$48.57 a barrel.
"Our near-term focus is clear, drive down costs and apply available cash flow to reduce debt.”