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Santos reports fall in 2Q20 revenue

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Oilfield Technology,

As reported by Reuters, Santos has announced an 18% drop in 2Q20 revenue due to lower realised prices for its oil and gas, but said production from its core assets was expected to remain steady in the near term.

The company said sales revenue fell to US$785 million in the June quarter from US$959 million a year earlier, missing a consensus forecast from RBC and UBS of US$850 million.

Average realised prices for its LNG during the three-month period slid to US$8.27/mmBtu, from US$9.09/mmBtu a year earlier.

Energy players have been hit this year by a global gas glut and sluggish demand, with the coronavirus pandemic bringing economic activity to a virtual halt.

On Monday, Santos warned of an up to US$560 million impairment, mostly on its Queensland-based Gladstone LNG project, owing to an over 10% reduction in the company’s long-term oil price assumption.

Santos however reported a record production of 20.6 million boe during the period, up from 18.6 million boe last year, helped by higher output across its Western Australia assets.

“Production levels from our core assets are expected to remain relatively steady for the next five or six years, allowing us to continue to progress our major capital projects,” CEO Kevin Gallagher said in a statement.

The Adelaide-based firm narrowly trimmed its annual production forecast to between 83 million boe and 88 million boe, from its earlier range of 81 million boe and 89 million boe.

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