Santos Q2 production lifts

Oil and gas explorer benefits from start of PNG LNG project, reaffirms FY guidance.

Santos has reported increases in second-quarter production, sales and revenue after its Papua New Guinea LNG project commenced production in April, ahead of schedule.

The oil and gas explorer's production rose 3% in the June quarter to 12.8 million barrels of oil equivalent (mmboe), compared with 12.4 mmboe in the second quarter of 2013.

Sales lifted 5% to 15.1 mmboe, from 14.4 mmboe in the previous corresponding period.

Revenue jumped 22 per cent in the quarter to $974 million, compared with $797m a year earlier. 

Santos reaffirmed its full-year guidance, saying it still expects production between 52 mmboe and 57 mmboe in calendar 2014.

Chief executive David Knox said delivery of the PNG LNG project was an important milestone that would help Santos become a major LNG supplier to Asia.

"This project will significantly lift Santos' LNG production once the project reaches full output and we are already seeing the contribution it is making," Mr Knox said.

Santos flagged a non-cash impairment charge of approximately $70m in its half-year results associated with its Indonesian coal seam gas assets, due to its decision to withdraw from South Sumatra CSG.