Santos misses Q1 production expectations

Oil and gas exploration group lifts Q1 production, reaffirms FY guidance.

Santos (STO) has reaffirmed its full-year production guidance despite first quarter production coming in well under market expectations.

In the quarter, the oil and gas exploration group produced 12.2 million barrels of oil equivalent (mmboe), a 1% increase on the 12.1 mmboe produced in the first quarter of 2013.

Economists surveyed by Bloomberg had expected first-quarter production of 12.7 mmboe.

Santos reaffirmed its full-year production guidance of 52 to 57 mmboe.

Sales in the quarter totalled 13.8 mmboe, a 6% lift year-on-year.

Sales revenue came to $913 million, a 28% increase on the $713 million posted in the previous corresponding quarter, primarily due to higher third-party crude oil sales

Santos maintained its full-year capital expenditure guidance of $3.5 billion, and its production costs range of between $820 million to $880 million.

Knox upbeat on LNG projects

Santos managing director and chief executive officer David Knox said the first-quarter results will build momentum for strong project delivery in the year ahead.

"The PNG LNG project is progressing ahead of schedule, with first LNG cargo expected for the middle of this year," he said.

"The project is currently over 95% complete with first production of condensate from the Hides fields commencing in late March."

Mr Knox also said its GLNG project in Queensland remained on budget and on track to deliver its first LNG in 2015.

"The project is now 80% complete, with all train 1 modules delivered to Curtis Island, all mainline pipeline in the ground, the marine crossing tunnel complete and the pipeline installed," he said.