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Summary

Santos has released its 2013 Second Quarter Activities Report, announcing record first half sales revenue and growth projects on track.

Growth projects on track; record first half sales revenue

  • Santos today announced second quarter production of 12.4 million barrels of oil equivalent (mmboe), 2% higher than the first quarter of 2013.
  • Gas production of 51.7 PJ (8.9 mmboe) was 6% lower than the corresponding period, with higher production from Darwin LNG offset by lower production in the Cooper and Carnarvon Basins and Indonesia.
  • The average gas price of $5.61/GJ for the June quarter was a record and 16% higher than the corresponding quarter, driven by higher sales from Darwin LNG and higher gas prices in the Cooper Basin and Indonesia.
  • Quarterly crude oil production of 2.4 mmbbl was 27% higher than the previous quarter, with the start-up of Fletcher Finucane in late May and higher production from Stag and the Cooper Basin.
  • Sales revenue of $797 million for the June quarter was 8% higher than the corresponding quarter, primarily due to higher oil sales and stronger gas prices.
  • Production guidance for 2013 has been reduced by approximately 3% to 52 to 55 mmboe. Refer to page 2 of the PDF download below for further details.

Key activities during the period

  • First oil production from Fletcher Finucane offshore Western Australia on 20 May 2013, ahead of schedule and on budget.
  • Gas discoveries at the Bassett West, Bianchi and Winchester wells offshore Western Australia.
  • Major growth projects on track: PNG LNG is approaching 90% complete and on track for first LNG in 2014, and GLNG is over 60% complete and on track for first LNG in 2015.
  • Significant milestones achieved at the GLNG project, including 70 wells spudded during the quarter, the first LNG tank roof raise successfully completed, the first Train 1 modules installed on Curtis Island and an agreement signed with QGC to interconnect both projects’ major pipelines.
  • Execution of a binding agreement with Drillsearch Limited relating to a series of permits in the Cooper Basin that will see Santos grow its significant portfolio of oil and gas assets in the region.

Santos Chief Executive Officer David Knox said that Santos continued to achieve significant milestones across the business during the quarter, building the foundations for future growth.

“We’ve delivered the Fletcher Finucane project on budget and ahead of schedule, announced gas discoveries at the Bassett West, Bianchi and Winchester exploration wells and increased our Cooper Basin acreage.”

“I’m pleased to report that GLNG is now over 60% complete, with the first LNG tank roof raise complete, first modules installed and the marine crossing tunnel progressing ahead of schedule.”

“This quarter also saw us finalising the first significant bilateral agreement between Queensland’s LNG projects, linking the GLNG and QCLNG projects’ pipelines. This agreement will allow for improved flexibility and efficiency in our operations and demonstrates the potential of collaboration.”

“PNG LNG, our other major growth project remains on track to deliver its first LNG cargo next year, providing a substantial boost to our production, and it is our intent to review capital management options as we approach PNG LNG production,” Mr Knox said.