High PNG LNG Output Helps Boost Santos Revenue

Record daily production rates at the PNG LNG terminal in the July-September quarter (3Q) has helped drive a lift in sales revenue for Australian Santos which included record LNG revenues, the company said October 18.

Santos’ total production stood at 15 million barrels of oil equivalent for the period, which is up 6% from 2Q. And, its sales revenue was $973mn, up 10%, it said.

The LNG sales revenue was $405mn, up from $323mn the quarter prior, it said.

“Third quarter sales volumes were higher than the prior quarter primarily due to a full quarter of production from PNG LNG following the impact of the earthquake in the first-half and the planned one-month maintenance shutdown of the Bayu Undan/Darwin LNG facilities in May, partially offset by lower crude oil sales volumes due to the cessation of production from the Mutineer Exeter/Fletcher Finucane asset in Western Australia in the second quarter and the completion of the sale of the non-core Asian assets on 6 September 2018,” it said.

Santos’ share of LNG from PNG LNG was 303,500 metric tonnes, up from 203,400 mt in 2Q and from 285,700 mt in 3Q last year, the results said.

Full production resumed at PNG LNG in April and during 3Q the facility achieved record daily rates of about 9.2mn mt per year, it said.

Santos also lifted the lower end of its production guidance for 2018. It now stands at 74-76mn boe rather than 72-76mn boe, it said.

Last month, Santos said it plans to lift its current production levels to more than 100mn boe by 2025, aided by the planned Quadrant Energy acquisition, an expansion at PNG LNG and growth at its Australian Cooper Basin, Gladstone LNG and Eastern Queensland operations.  

“With a balance sheet now supported of growth, we also announced the value accretive acquisition of Quadrant Energy’s high quality portfolio of low-cost, long-life conventional natural gas assets in Western Australia that will further reduce our free cash flow breakeven oil price and importantly, significantly enhance our operating capability. The acquisition will also give us a leading position in the highly prospective Bedout Basin, including the recent significant Dorado-1 oil discovery,” Santos managing director and CEO Kevin Gallagher said.