New projects push Santos and Woodside to records
Woodside's Pluto LNG project north of Karratha helped boost overall production 31 per cent in 2012 to 85 million barrels of oil equivalent (mmboe), although prices fell in the fourth quarter as fewer cargoes went to the higher-priced spot market - a one-off due to a quicker-than-expected ramp-up in the second and third quarters. Woodside's sales rose 30 per cent to $US6.2 billion.
Santos reported record sales in 2012 of $3.2 billion, up 18 per cent, driven by a 33 per cent rise in crude oil production from Reindeer in the Carnarvon Basin and Chim Sao off Vietnam. Although production rose 10 per cent to 52 mmboe in 2012, that is short of Santos's record 61 mmboe in 2006 when Mutineer-Exeter off WA peaked.
Woodside shares were unchanged at $35.20. Santos rose 8c to $11.72 in a flat market.
Shares in both companies have rallied in recent months in the wake of announcements by Woodside, which has entered into a joint venture at Israel's Leviathan field with Noble Energy, and Santos, which has reported shale gas production from the Cooper Basin and a discovery at its Crown field in the Browse basin.
One analyst, speaking off the record, said both production reports tallied with expectations. "There was nothing too new in either of them. There is the potential Santos is towards the bottom end (of consensus forecasts), so that might surprise some of the other guys out there. Some analysts may be over-estimating what some of (Santos's) fields can do."
Santos gave updated guidance on production costs for 2012 of $660 million, above estimates of up to $640 million. Santos said its major projects PNG LNG and Gladstone LNG were were more than 70 and 45 per cent complete, and on track for first gas from 2014 and 2015, respectively. Santos drilled 143 coal seam gas wells in the Surat and Bowen Basin as part of the Gladstone LNG project, slightly below target analysts said.
Frequently Asked Questions about this Article…
Woodside’s Pluto LNG project north of Karratha was the main driver, helping lift overall production 31% in 2012 to 85 million barrels of oil equivalent (mmboe). That higher output helped sales rise about 30% to US$6.2 billion.
Prices fell in the December quarter because fewer cargoes went to the higher‑priced spot market. The company said this was a one‑off effect from a quicker‑than‑expected ramp‑up earlier in the year (second and third quarters).
Santos reported record sales of A$3.2 billion in 2012, up about 18%. The increase was driven largely by a 33% rise in crude oil production from the Reindeer field in the Carnarvon Basin and the Chim Sao field off Vietnam.
Santos’ production rose about 10% in 2012 to 52 mmboe, but that remained below its 2006 record of 61 mmboe when the Mutineer‑Exeter field off Western Australia peaked.
On the day reported, Woodside shares were unchanged at $35.20 while Santos rose 8 cents to $11.72 in a flat market. Both companies had already rallied in recent months on positive project and project discovery news.
Woodside entered a joint venture at Israel’s Leviathan gas field with Noble Energy, and Santos reported shale gas production from the Cooper Basin plus a discovery at its Crown field in the Browse Basin—updates that helped lift investor sentiment.
Santos updated 2012 production costs to about A$660 million, higher than some estimates of up to A$640 million. It also said its PNG LNG and Gladstone LNG projects were more than 70% and 45% complete respectively, and were on track for first gas in 2014 (PNG) and 2015 (Gladstone).
An analyst said the production reports generally matched expectations and weren’t surprising. They cautioned that Santos might be toward the bottom end of consensus forecasts and that some analysts could be over‑estimating certain fields—so investors should weigh guidance and project progress when forming views.
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