Santos warns on FY production

Petroleum producer expects production at lower end of guidance after posting a slight year-on-year fall in Q3 result.

Santos (STO) says it is still on track to meet its full-year production guidance, but likely at the lower end, after posting a slight year-on-year slip in third-quarter production.

In the three months to September 30, Santos produced 13.4 million barrels of oil equivalent (MMboe), a 1% decrease on the 13.5 MMboe produced in the previous corresponding period.

In the same period, sales revenue surged 20% to $1.027 billion, from $853 million in the third quarter of fiscal 2012.

Santos said full-year production is expected to be at the low end of the previously stated guidance range of 52 to 55 MMboe, primarily due to deferred oil and gas production from Chim Sáo and deferred oil production from Fletcher Finucane.

The Chim Sao oil field operations offshore of Vietnam have been disrupted due to the shutdown of a gas export pipeline in late August.

Those same operations caused a production downgrade in April.

Santos's Fletcher Finucane project has been producing less oil due to equipment problems.

Oil production was at its highest in six years, backed by strong oil prices and higher third party sales volumes, the company said.

The average gas price of $5.98 a gigajoule for the quarter was a record and 10 per cent higher than the corresponding quarter.

Domestic gas supply contracts in Australia are being struck at export parity pricing due to a suite of new LNG export projects, which is angering local businesses.

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