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Quarterly production summary

  • September quarter production of 13.9 mmboe was 5% higher than the September 2008 quarter and 4% higher than the June 2009 quarter.
  • Quarterly natural gas production (including ethane and LNG) of 61PJ was 12% higher than the September 2008 quarter and 2% higher than the June 2009 quarter.
  • Crude oil production in the September quarter was 11% higher than the June 2009 quarter primarily due to the reinstatement of production at Mutineer Exeter in June following a planned outage and solid production from the Cooper Basin and Stag.

Sales revenue impacted by lower international oil prices

  • September quarter average realised oil price of A$82.52 per barrel was 44% lower than a year earlier due to lower international oil prices.
  • September quarter average portfolio gas price of $4.03 per gigajoule was 18% lower than the corresponding period primarily due to lower prices for oil price linked gas sales contracts.

Key activities during the period

  • First gas from the Oyong Phase 2 project in Indonesia. Gas production commenced on time and with an excellent safety performance. Production is ramping up as planned towards plateau rates of approximately 60 mmscfd gross.
  • Sale of 60% interest in the Petrel, Tern and Frigate gas fields in the Bonaparte Basin to GDF SUEZ for US$200 million. GDF SUEZ will lead the development of Bonaparte LNG, a proposed 2mtpa floating LNG project, and the marketing of the LNG. GDF SUEZ will carry Santos’ share of pre-FEED and FEED costs and make an additional payment of US$170 million upon FID of the project.
  • Gas discovery in the Browse Basin offshore Western Australia with the Burnside-1 well which encountered a 65 metre gross gas column in the primary target. The acquisition of significant additional acreage in the Gunnedah Basin in northern New South Wales and an investment in leading local coal seam gas company Eastern Star Gas Limited.

Santos Chief Executive Officer David Knox said the base business delivered a solid production performance in the September quarter which positions the company to meet its 2009 production guidance of between 53 and 56 million barrels of oil equivalent.

“Our LNG portfolio continues to develop with the addition of our fourth project, Bonaparte LNG, during the quarter. Both PNG LNG and GLNG® continue to demonstrate good progress and are on track for final investment decisions by the end of 2009 and the first half of 2010 respectively, while Darwin LNG is delivering solid production.”

“Looking forward, we remain focussed on performance from the base business, delivering significant growth through our LNG projects and focussed opportunities in Asia.”

“We continue to believe natural gas has a strong role to play in addressing the twin challenges of carbon emissions and energy security – in Australia and in Asia,” Mr Knox said.