Falling oil prices have caused a 24 per cent slide in quarterly sales for energy giant Santos, as it continues to cut costs.
The country’s second largest energy producer’s revenue was $US825 million ($A1.06 billion) in the three months to March, down from $US1.09 billion in the December quarter, and 10 per cent lower than the March quarter of 2014.
“Sales revenue was 10 per cent lower primarily due to the fall in global oil prices, partially offset by stronger domestic gas prices and a weaker Australian dollar,” chief executive David Knox said.
The company’s average realised oil price of $A72 per barrel in the March quarter was down 22 per cent on the December quarter.
Knox said Santos had taken prompt and decisive actions to respond to low oil prices, cutting its quarterly capital expenditure by 40 per cent from 12 months earlier.
“We continue to make solid inroads towards reducing production costs per barrel across the business,” Knox said.
Benchmark oil prices have risen in the past week, surging to $US56 a barrel overnight.
Santos produced 14 million barrels of oil equivalent (mmboe) in the March quarter, down seven per cent on the December quarter but 15 per cent higher from 12 months earlier.
It still expects to achieve full year production between 57 and 64 mmboe, with capital expenditure of $2 billion.
Knox said Santos had delivered a sound start to 2015, making good progress on the commissioning of the Gladstone LNG (GLNG) project.
First gas is expected at GLNG around the end of the third quarter of 2015, and the project remains within its $US18.5 billion budget.
Santos shares were up 12 cents at $8.05 at 1105 AEST.
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