Santos lowers FY production guidance

Oil giant reduces guidance by 3% as second-quarter production falls, sales revenue lifts in first half.

Santos Ltd has downwardly revised its full-year production guidance on a decline in second-quarter oil production.

In the three months to June 30, Santos produced 12.4 million barrels of oil equivalent (mmboe), a 5% fall on the 13 mmboe in the previous corresponding period.

As a result, the oil giant's year-to-date, or first-half, production was 24.5 mmboe, a 4% fall on the 25.4 mmboe in the previous corresponding half year.

Santos said it had reduced its full-year production guidance by around 3% to between 52 mmboe and 55 mmboe.

Previously, full-year guidance was set at a range between 53 mmboe to 57 mmboe.

It said the revision was due in part to deferred oil and gas production from the Chim Sao oil field in Vietnam due to problems with its offshore production and shipping facility.

Other factors contributing to the decline included natural field decline in Sangu, off Bangladesh, and deferred oil production in West Australia's Carnarvon Basin, due to poor weather.

However, sales revenue rallied in the quarter, coming in at $797 million, an 8% increase on the $739 million in the previous corresponding period.

Year-to-date, sales revenue was slightly higher than the previous corresponding half year, primarily due to higher oil sales and stronger gas prices (see Tim Treadgold's Santos fires up on LNG).

"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," Santos said.

In the six months to June 30, sales revenue was $1.51 billion, a 1% lift on $1.493 billion in 2012.

In the three months to June 30, gas production was 51.7 pj, a 6% fall on the 55 pj recorded in the previous corresponding period.

Santos said it higher production from Darwin LNG was offset by lower production in the Cooper and Carnarvon Basins and Indonesia.

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