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2011 sales revenue up 14%, higher oil production, projects delivered on plan

  • 2011 production of 47.2 mmboe was within the company’s guidance range and 5% lower than 2010, primarily due to the sell-down of Santos’ interest in GLNG from 60% to 30%. Sales revenue of $2.5 billion was 14% higher than 2010.
  • Sales revenue of $750 million in the December quarter was 10% higher than third quarter and 25% above the corresponding period, driven by higher oil and natural gas prices.
  • December quarter natural gas, ethane and LNG production was 15% lower than the previous quarter, primarily due to adverse weather reducing well connections in the Cooper Basin combined with a lower net entitlement from Maleo, Indonesia, resulting from a favourable gas price review.
  • Average gas price of $5.55/GJ for the December quarter was 21% higher than the previous quarter, driven by higher gas prices from Maleo, as well as a higher LNG prices.
  • Quarterly crude production was 36% above the third quarter primarily due to production from Chim Sáo in Vietnam commencing in October.

Key activities during the period

  • First oil from Chim Sáo in Vietnam in October, on schedule and under budget.
  • First gas from Reindeer/Devil Creek in Western Australia in December, on schedule and budget.
  • Completion of the acquisition of Eastern Star Gas Ltd in November, together with the associated sell-down of 20% of the permits to TRUenergy.
  • Sale of Santos’ interest in Evans Shoal (NT/P 48) in the Bonaparte Basin for up to $350 million.
  • Drilling of Santos’ first dedicated shale well, Moomba 191, in the Cooper Basin.
  • Award of PSC for Block 13/03 in Vietnam.
  • Secured US$1.2 billion in Export Credit Agency (ECA) supported corporate senior debt facilities.
  • Launch of an Australia-first online water portal, which shows results from 100 locations at which the Santos GLNG project monitors surface and groundwater.
  • On 13 January 2012, the final investment decision was taken on the $490 million Fletcher Finucane oil project in the Carnarvon Basin, offshore Western Australia.

Santos Chief Executive Officer David Knox said the company had delivered production within guidance in 2011, despite the impact of well connection delays in the Cooper Basin due to wet weather and a lower net entitlement to Maleo gas production in Indonesia following the favourable price review. Sales revenue in 2011 was up 14% to $2.5 billion.

“Revenue was higher in the fourth quarter due to strong oil and gas prices, and higher crude oil production, which increased by 36% following first oil from Chim Sáo.”

Mr Knox said the on-time, on-budget start-ups of Chim Sáo and Reindeer during the fourth quarter positioned the company to deliver production growth in 2012.

“PNG LNG and GLNG construction progress is pleasing and first LNG is expected in 2014 and 2015 respectively,” Mr Knox said.