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Summary

1998 Fourth Quarter Activities Report

Fourth Quarter Highlights

The following results were achieved compared with the 1997 fourth quarter:

  • Production volume increased by 14.5% to 12.3 million boe
  • Sales volume increased by 21.4% to 12.5 million boe
  • Sales revenue increased by 10.8% to $217.6 million

Full Year Highlights

Full year highlights compared with 1997 are as follows:

  • Production volume increased by 11.0% to 45.6 million boe
  • Sales volume increased by 9.2% to 45.1 million boe
  • Sales revenue decreased by 1.2% to $769.4 million

Comment by Mr Ross Adler, Managing Director:

The increases in sales revenue and sales and production volumes during the fourth quarter were pleasing.

These contributed to record sales and production volumes being achieved for the full year.

Sales revenue for the year fell only marginally despite significantly lower liquids prices because production growth has largely offset the impact of lower crude oil and condensate prices.

However, the reduction in 1998 earnings will be proportionately greater than the fall in sales revenue. This reflects the higher costs of increased production coming from new areas but lower total sales revenue.

On 7 September 1998 Santos forecast that earnings for the 1998 full year were expected to be approximately 12.5% below the record 1997 financial results, assuming an oil price of A$22.50 per barrel for the second half. Since that time the oil price has been lower than forecast and production from the Stag oil field has not reached forecast levels. As a result of these factors 1998 earnings are expected to be marginally below previous forecasts.