PERTH (miningweekly.com) – Oil and gas giant Santos on Friday reported a net loss of A$935-million for the year ended December, after reporting a A$1.5-billion noncash impairment charge.

This compared with a net profit of A$516-million in the previous financial year.

The ASX-listed major previously warned that it would report a major impairment charge and, at the time, explained that it reflected the lower oil price environment and a noncash accounting adjustment that related to the historical book value of the company’s assets.

However, MD and CEO David Knox pointed out on Friday that despite the reported loss, the company had made significant progress in 2014.

Production for the full year increased by 6%, to 54.1-million barrels of oil equivalent, compared with the previous financial year, while sales revenues were up by 12% to A$4-billion.

Earnings before interest, taxes, depreciation and amortisation increased by 8% on the previous year, to A$2.1-billion.

“Our results today reflect the many achievements of the company in 2014, highlighted by the start-up of the Papua New Guinea liquefied natural gas (LNG) project ahead of schedule and the start of commissioning of the Gladstone LNG (GLNG) project,” Knox said.

“Santos also delivered its highest production in five years, record sales revenue and strong operating cash flows.”

Knox pointed out that with the underlying performance of the business remaining strong, Santos was looking forward to further production growth in 2015, with the start of the $18.5-billion GLNG project in the second half of the year.

Santos expected production in 2015 to between 57-million and 64-million barrels of oil equivalent, and said it would spend about $2-billion in capital over the financial year.

Knox said that the company would also continue to proactively manage its costs, both in capital and operating terms, with production costs expected to drop by 10%.

“Costs will be tightly managed as we work through the current oil price environment,” he added.