Santos slashes spending

1August 11, 2015

By Courtney Pearson

IN line with poorer market conditions, Santos has cut its spending by 65 per cent compared with the corresponding quarter last year.

Santos slashed spending from about $1 billion this time last year to just $366 million in order to “strengthen the company’s operating position in the lower oil price environment”, according to Santos managing director and chief executive David Knox.

Falling oil prices hit the company’s sales revenue, which fell 19 per cent to $786 million compared to $974 million this time in 2014, when the average realised oil price was more than 30 per cent higher.

“Year to date capital expenditure is 53 per cent below 2014 levels and our productions costs for the first half are tracking below guidance at $14 per barrel of oil equivalent,” Mr Knox said.

Santos stated that the US$18 billion GLNG project will produce first LNG by the end of the third quarter, with all upstream facilities commissioned and fully operational with “excellent progress on Curtis Island”.

The company missed a stretch target of exporting LNG from the project at the end of July but is on track for the official target by the end of the third quarter.