Santos downgrades forecastSource: MELBOURNE AAP Date:...

Santos downgrades forecast
Source: MELBOURNE AAP
Date: 2004-Jul-23 05:53 PM

Australia's third largest oil and gas producer, Santos Ltd, has reported an 18 per cent fall in first half sales revenue as declining production offset a significant rise in oil prices.

The company's total oil and gas production for the six months to June 30, 2004 fell by 5.3 million barrels of equivalent (boe) and is expected to remain weak for the rest of 2004 following the recent sale of its Otway Basin assets in Victoria.

Santos said it expected oil and gas output for calendar 2004 to be in the range of 45-46 million barrels of oil equivalent (boe), lower than previously anticipated.

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Santos said first half production was impacted by the New Year's day fire at its Moomba gas plant in the Cooper Basin and poorer than expected performance from its Stag and East Spar field off Western Australia.

Sales revenue in the six months to June 30, 2004 fell to $590.5 million compared to $716.1 million reported in the first half of 2003.

Analysts said warmer than usual June weather, particularly in NSW, would have had an impact on gas sales for Australia's largest gas producer.

" But July has been extremely cold so they could make it back if July and August remain that way," Shaw Stockbroking's head of resources research John Colnan said.

Mr Colnan said the impact of the Moomba incident had been well flagged, nevertheless he said the latest full year production forecast was disappointing and down on previous guidance from the company.

LPG sales revenue for the six months to June 30, 2004 fell more than 70 per cent to $13 million.

Condensate sales revenue dropped 30 per cent to $51.2 million, gas and ethane sales revenue for the half was down 17 per cent to $296 million.

Crude oil sales revenue, up $1.6 million to $229.5 million, was boosted by a higher average oil price of $US32.63 for the half compared to $US28.63 for the same period in 2003.

Santos managing director John Ellice-Flint estimated lost production in the second quarter directly attributable to the Moomba fire was one million boe.

The company maintained expectations that total production impact of the fire would be four million boe in the current calendar year, Mr Ellice-Flint said.

" Estimated lost production in the second quarter directly attributable to the incident was 3.1 petajoules (PJ) of sales gas, 0.2 million barrels of condensate and 43,000 tonnes of LPG," Santos said.

" Production outside the Cooper Basin declined by 600,000 boe as lower gas and oil production occurred due to natural field decline, particularly at the Stag oil field (in Western Australia's Carnarvon Basin) and problems with water breakthrough at the East Spar field (also in the Carnarvon Basin)."

By Jane Williams


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