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Higher quarterly production and sales revenue

  • Production of 12.7 million barrels of oil equivalent (mmboe) in the September quarter was 7% higher than the second quarter of 2011 and 2% lower than the corresponding period in 2010.
  • Cooper Basin gas and oil production increased as field conditions continue to improve following adverse weather earlier in the year.
  • Quarterly natural gas, ethane and LNG production was 6% above the second quarter due to higher production from the Cooper Basin, Western Australia and Victoria. The average realised gas price was $4.57 per gigajoule, 8% higher than the corresponding period.
  • Quarterly crude production was 6% above the second quarter primarily due to higher production from the Cooper Basin and Mutineer-Exeter.
  • Sales revenue of $680 million in the September quarter was 13% higher than the second quarter and 27% above the corresponding period.
  • Production guidance for 2011 is maintained at 47 to 50 mmboe.

Key activities during the period

  • Proposed acquisition of 100% of Eastern Star Gas (ESG) via a recommended scheme of arrangement, with a subsequent sale to TRUenergy of a 20% working interest in ESG’s permits in the Gunnedah Basin as well as an interest in other ESG assets. If approved by ESG shareholders at a Scheme Meeting on 28 October 2011, completion is expected by mid-November.
  • First oil production from the Chim Sáo project in Vietnam was achieved in early-October, with the project being delivered on schedule and under the sanctioned budget.
  • Construction continues to progress on the PNG LNG and GLNG projects, which are on schedule for first LNG in 2014 and 2015 respectively.
  • Reindeer and Wortel projects progressing on schedule for first gas by the end of the year.
  • GLNG launched the Mount Hope Station Irrigation Pilot Project, a Queensland-first partnership between a CSG company and a private landholder, which provides a state-of-the-art pilot irrigation system which uses treated CSG water to irrigate high protein forage crops.

Santos Chief Executive Officer David Knox said output of all the company’s product streams was higher in the third quarter as operations continued to recover from adverse weather earlier in the year.

“Cooper Basin gas and oil production increased as field conditions continued to improve,” Mr Knox said.

“GLNG construction activity continues to ramp-up quickly. Site clearing on Curtis Island is complete and bulk earthworks are well underway.”

“I am pleased with the progress of the project since FID in January this year. First LNG is expected in 2015.”

Mr Knox said the start-up of the Chim Sao project in Vietnam represented a significant addition to Santos’ oil production.

“Chim Sao is the second of four new projects in the base business to commence production this year and follows the Halyard/Spar project in Western Australia, which commenced production in June. The other two projects – Reindeer in WA and Wortel in Indonesia – are on schedule for first production by the end of the year,” Mr Knox said.