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Summary

Santos has released its 2012 Second Quarter Activities Report detailing production up 9% and sales revenue up 18%.

Second quarter production up 9% and sales revenue up 18%

  • Santos today announced a 9% lift in second quarter production to 13 million barrels of oil equivalent (mmboe).
  • Quarterly crude oil production of 2.4 million barrels was the highest in four years and 46% above the corresponding period due to production from Chim Sáo in Vietnam and higher Cooper Basin oil production. The average realised oil price for the quarter was US$116.56 per barrel.
  • Gas production of 55 PJ (9.5 mmboe) was 4% above the corresponding period primarily due to production from new assets in Western Australia partially offset by the planned shutdown of Darwin LNG during the current quarter.
  • The average gas price of $4.83/GJ was up 5% on the corresponding period, primarily reflecting higher Indonesian gas prices following the favourable Maleo price review and the commencement of production from Reindeer in Western Australia, partially offset by lower LNG sales volumes due to the planned Darwin LNG shutdown.
  • Sales revenue of $739 million for the June quarter was 18% higher than the corresponding period, driven by higher oil and gas prices and higher sales volumes. Timing of oil shipments resulted in a 488,000 barrel net underlift in the first half of 2012, which is expected to be recovered during the remainder of the year.
  • Production guidance for 2012 is maintained at 51 to 55 mmboe.

Key activities during the period

  • The capital cost estimate for the GLNG project was increased from US$16 billion to US$18.5 billion for the period from FID until the end of 2015. The incremental US$2.5 billion will fund additional upstream development projects in the Fairview and Roma areas.
  • Final investment decision to develop the Dua oil field in Vietnam. Subject to Vietnamese Government approval, Dua will be developed as a tie-back to the existing Chim Sáo facilities with first oil expected in the first half of 2014.

Agreement signed with ConocoPhillips and SK E&S to progress the development of Caldita Barossa;

  • SK E&S to fund up to US$520 million in carry obligations and contingent payments.
  • Santos announced a new approach to landowner and community compensation for its NSW operations.

Santos Chief Executive Officer David Knox said the on-time start-up of new projects had contributed to the highest quarterly production result since 2009.

“Higher production, including our best quarterly oil output in four years, combined with strong oil and gas prices, has delivered another solid quarterly result, setting a strong foundation for the second half of 2012.”

“The PNG LNG and GLNG projects remain on-track for first LNG in 2014 and 2015 respectively,” Mr Knox said.