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PERTH (miningweekly.com) – Oil and gas major Santos has reported a 25% increase in sales revenue for the half-year ended June, as production from the Papua New Guinea (PNG) liquefied natural gas (LNG) project added to the company’s coffers.
Sales revenue for the period increased to $1.8-billion, compared with the $1.5-billion reported in the previous corresponding period, as sales volumes increased by 5%, to 28.9-million barrels of oil equivalent.
“The start-up of PNG LNG and receipt of first cash from the project has enabled the company to substantially increase returns to shareholders through a 33% increase in the interim dividend to 20c per share, fully franked,” said Santos chairperson Ken Borda.
He noted that the first-half results reflected record sales revenue, driven by higher crude oil and LNG sales volumes, as well as higher oil and gas sales prices, which was offset by a $67-million noncash impairment charge at the company’s Indonesian coal seam gas assets and higher cost of sales, exploration expenses and net finance costs.
Accounting for the impairment cost, Santos’ net profit for the period declined by 24%, to $206-million, compared with the $271-million reported in the first half of 2013.
Earnings before interest, tax, depreciation and amortisation increased by 13% during the interim period, up to $950-million, from $844-million reported in the previous corresponding period.
MD and CEO David Knox said on Friday that the company’s first-half results had set the foundation for a stronger second half.
“PNG LNG is producing at full capacity and Gladstone LNG is more than 85% complete and on track to start up next year, within budget,” Knox said.
For the full 2014 financial year, Santos said it expected to produce between 52-million and 57-million barrels of oil equivalent.
Meanwhile, Santos also announced a significant gas condensate discovery at its Lasseter-1 exploration well, in the Browse basin offshore Western Australia.
“Lasseter is a material discovery that adds to our strong position in the Browse, following our success with the Crown discovery in 2012,” said head of exploration Bill Ovenden.
He noted that the Lasseter discovery well was well positioned, and in close proximity to existing and proposed LNG projects in the Browse basin, as well as other Santos joint venture exploration prospects.
The well is located some 35 km from the Crown discovery and 480 km from Broome.