PERTH (miningweekly.com) – Australian oil and gas major Santos has reported an increase in production and sales volumes during the first quarter of 2015, but lower oil prices have led to a decline in sales revenue.
Santos on Friday announced that production had increased by 15% year-on-year to 14-million barrels of oil equivalent, while sales volumes had risen by 10% year-on-year to 15.2-million barrels of oil equivalent.
However, the falling global oil prices resulted in a 10% decline in sales revenue, which was down to A$566-million, compared with the A$944-million achieved in the first quarter of last year.
Santos MD and CEO David Knox told shareholders that the company had delivered a sound start to the 2015 financial year, which included progress on the commissioning of the Gladstone liquefied natural gas (LNG) project, as well as exploration success offshore Malaysia.
“I’m pleased to report strong progress at Gladstone LNG, where first LNG is now expected around the end of the third quarter, within the $18.5-billion budget. First gas was introduced into the LNG plant in early March, and the first two gas turbine generators, which provide electrical power supply to the plant, are running.”
While Santos’s focus was firmly on the development of its assets, Knox noted that the company had taken “prompt and decisive actions” to respond to the current low price oil environment.
“First-quarter capital expenditure (capex) was 40% lower than last year, and we continue to make solid inroads towards reducing production costs per barrel across the business,” he added.
Capex for the 2015 financial year was expected to be A$2-billion.
The group provided a full-year production guidance of between 57-million and 64-million barrels of oil equivalent.