Australian Santos Lifts Bottom End of Production, Sales Guidance

Australian gas producer Santos has lifted the bottom end of its 2017 guidance range for both production and sales following strong operating performance in Q3, the company said October 19.

It is now expecting production of 58mn boe-60mn boe for this year – up from the previously expected 57mn boe-60mn boe – plus sales of 79mn boe-82mn boe, up from its earlier guidance of 77mn boe-82mn boe, it said.

Santos’ output was 15mn boe in Q3, up by 2% from the 14.7mn boe produced in the April-June period, it said in its quarterly results.

The increase was primarily driven by higher production from its Cooper Basin, Queensland, Papua New Guinea and Western Australian assets, it said.

Sales volumes were unchanged quarter on quarter at 21.5mn boe and sales revenue for Q3 rose 3% from $769 million to $793 million, it said.

The rise in sales revenue was largely driven by higher LNG, condensate and LPG prices, it said.

“A solid quarterly result from Santos with production 4% higher than our expectations [was] due to a beat at GLNG where we had factored in lower production due to the LNG train 1 shutdown,” RBC Capital Markets analyst Ben Wilson said.

“Sales revenue was strong due to the higher sales volumes and strong realised pricing with the realised LNG price of US$7.50/mn btu up on the prior quarter (US$7.32/mn btu) and domestic gas sales slightly higher than our estimates at US$4.56/GJ (vs RBCe US$4.34/GJ),” he said.

The GLNG project at the Port of Gladstone in Queensland produced a total of 1.23mn metric tons of LNG in the September quarter, up from 1.07mn mt seen in Q2, but down from the 1.31mn mt of Q3 last year, Santos’ results showed. 

Nathan Richardson