Sales revenue rose one per cent to $835 million in the first quarter of 2016 compared to a year ago, despite a 40 per cent jump in sales volume.
Oil prices dropped 28 per cent to $51.26 a barrel in the first quarter from the same period a year earlier. Prices were down 16 per cent in the first quarter from the fourth quarter of last year.
Santos has been cost cutting to offset the slide in oil prices, with capital expenditure down 59 per cent to $209 million in the first and fourth quarters.
Chief executive Kevin Gallagher said the company is “focused on developing a business that is self-sustaining in a low oil price environment and well positioned to take full advantage of rising commodity prices in the future”.
“We will continue to look for opportunities to lift productivity and reduce costs to drive long-term value for shareholders,” Mr Gallagher said Friday in a statement.
Santos produced 15.6 million barrels of oil equivalent (mmboe) in the first quarter of 2016, up 11 per cent from the same quarter last year and up five per cent on the fourth quarter of 2015.
Santos reaffirmed its annual production guidance of 57-63 mmboe.
Santos managing director and chief executive officer Kevin Gallagher said today the first quarter results reflected solid production and a firm commitment to drive costs down and improve efficiencies across the business.
“We are focused on developing a business that is self sustaining in a low oil price environment and well positioned to take full advantage of rising commodity prices in the future,” he said.
“We will continue to look for opportunities to lift productivity and reduce costs to drive long-term value for shareholders.”
In the Cooper Basin, sales gas and ethane production during the first quarter was 4% higher than the corresponding quarter last year, with the increase attributed to less downtime.
Four appraisal and four development gas wells were drilled during the quarter with seven of these were “cased and suspended” for future production.
Condensate production was in line with the corresponding quarter while LPG production of 29,000 tonnes was up 12% as a result of higher gas production.
Sales volumes were up 40 per cent on the corresponding quarter. First quarter sales revenue was $A835 million.
The average realised oil price decreased 28 per cent to $A51 (US$37) per barrel.
First-quarter upstream production costs of $A11.90 per barrel, excluding LNG plant costs, were 13% lower than the corresponding quarter.
First-quarter capital expenditure of $A209 million was 59% lower than both the corresponding quarter and the previous quarter.
Sales under the long-term contracts with GLNG’s foundation customers started at the end of March this year.
Santos will hold its annual general meeting at the Adelaide Convention Centre on Wednesday, May 4, at 10am.
– with AAP
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