Santos cuts oil, gas production forecasts

7/22/2013

Santos cuts oil, gas production forecasts

BY ROSS KELLY

SYDNEY -- Australia's Santos has announced a modest production downgrade after a Vietnamese production facility experienced a power outage and a project in Bangladesh ran out of natural gas.

Santos said it expects to post annual output for the year to Dec. 31 of between 52 and 55 MMboe. The midpoint of the company's guidance is about 2.7% lower than the midpoint of its previous guidance of between 53 and 57 MMboe.

Adelaide-based Santos said technical glitches affected oil and gas production at its Chim Sao floating production facility offshore Vietnam. It also pinned the downgrade on faster-than-expected natural field decline at its Sangu natural gas prospect in Bangladesh. Production at Sangu is now expected to cease entirely in the three months to September, Santos said.

Output for the entire company in the three months to June 30, its fiscal second quarter, fell by 5% to 12.4 MMboe. Revenue for the same period, however, increased by 8% to US$732 million due to Santos achieving higher prices for its gas prices and boosting oil output following the start up of the Fletcher Finucane project offshore Western Australia state.

Santos achieved a record average quarterly gas price of US$ 4.76 per gigajoule, up 16% on year. Australian east coast domestic gas prices are surging ahead of the looming startup of three massive gas-export plants in Queensland state that will suck supplies out of the market. Santos said its US$18.5 billion Gladstone liquefied natural gas joint venture is on track to start shipping cargoes in 2015.

Dow Jones Newswires

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