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Santos today released its 2012 First Quarter Activities Report. First quarter production was up 13% and sales revenue up 50%.

First quarter production up 13% and sales revenue up 50%

  • Production of 12.4 million barrels of oil equivalent (mmboe) in the March quarter was up 13% primarily due to production from new assets.
  • Quarterly gas production of 53PJ was 6% above the corresponding period due to new production from the Reindeer and Spar projects in Western Australia and Wortel in Indonesia, and higher Cooper Basin production as the recovery from flooding continues.
  • The average gas price of $5.21/GJ was up 24% on the corresponding period, driven by higher LNG prices, higher Indonesian gas prices following the Maleo price review and the commencement of production from Reindeer in Western Australia.
  • Crude oil production of 2.1 million barrels was 55% higher than the corresponding period following the commissioning of Chim Sáo in Vietnam in October 2011, combined with higher Cooper Basin oil production.
  • Sales revenue of $754 million for the March quarter was 50% higher than the corresponding period, driven by higher oil and gas prices and higher sales volumes, combined with a change in the accounting treatment for the purchase and sale of third party crude oil (see page 4).
  • Production guidance for 2012 is maintained at 51 to 55 mmboe.

Key activities during the period

  • Final investment decision on the $490 million Fletcher Finucane oil project in the Carnarvon Basin, offshore Western Australia. First oil is expected in the second half of 2013.
  • First gas from Wortel in Indonesia at the end of January, with the project delivered on budget.
  • First permanent concrete pour on Curtis Island for the GLNG train-1 foundations.
  • Fracture stimulation underway at the end of the quarter at Moomba-191, Santos’ first dedicated vertical shale well in the Cooper Basin.
  • Gas discovery at Sangu-11 in Bangladesh, which has been tied into the Sangu facilities.

Santos Chief Executive Officer David Knox said the company was beginning to reap the benefits of the successful and on-time project start-ups in 2011 that were now contributing to increased production.

“Our production compared to last year has increased as a result of adding four new projects to the base business.

“Higher production, combined with strong oil and gas prices, has delivered a solid first quarterly result, setting a strong foundation for 2012.

“Project delivery remains the focus of the PNG LNG and GLNG projects, both of which remain on-track for first LNG in 2014 and 2015 respectively,” Mr Knox said.