Santos lifts Q1 output, revenue flat in low price environment

PERTH (miningweekly.com) – Australian oil and gas major Santos on Friday reported an 11% increase in production during the first quarter of 2016, compared with the previous corresponding period.

The ASX-listed company reported that total production for the three months to March reached 15.6-million barrels of oil equivalent, compared with the 14-million barrels of oil equivalent delivered in the first quarter of 2015.

Compared with the fourth quarter of 2015, total production was up by 5%.

MD and CEO Kevin Gallagher said that the first quarter results reflected solid production and a firm commitment from Santos to drive down costs and improve efficiency across the business.

“We are focused on developing a business that is self-sustaining in a low oil price environment and well positioned to take full advantage of rising commodity prices in the future.

“We will continue to look for opportunities to lift productivity and reduce costs to drive long-term value for shareholders.”

Meanwhile, sales volumes for the quarter were up 40% on the previous corresponding period, from 15.2-million barrels of oil equivalent to 21.3-million barrels of oil equivalent.

However, average realised prices during the same period declined by 28%, from A$71.58/bl to A$51.26/bl, which resulted in sales revenue only increasing by 1%, from A$825-million to A$835-million.

Looking ahead at the full year, Santos expected production to reach between 57-million and 63-million barrels of oil equivalent, with sales volumes expected to top between 76-million and 83-million barrels of oil equivalent.