, , , , ,

Santos writes down assets amid oil price downturn

Santos’s fourth quarter sales revenue for 2015 was 24 per cent below the equivalent 2014 quarter, with oil prices down 33 per cent to $61 per barrel, according to the company’s 2015 fourth quarter activities report.

Additionally, Standard and Poor’s ratings Services (S&P) revised Santos’s long-term senior unsecured credit rating from BBB to BBB-.

However, Santos said its credit rating remains investment grade and there is no material change in its financial position as a result of the announcement from S&P.

Other findings from the report were:

  • fourth quarter production of 14.9 MMboe was in line with the corresponding 2014 quarter and brought full-year production to 5.7 MMboe – the highest annual production since 2007 and a 7 per cent increase on the previous year and within the company’s guidance range of 57-59 MMboe
  • full-year expenditure of $1.66 billion was below guidance and 54 per cent lower than the prior year
  • full-year production costs per barrel were 10 per cent lower
  • GLNG train 1 produced 544,000 t of LNG during the fourth quarter and achieved daily LNG production rates of more than 10 per cent above nameplate capacity
  • GLNG has shipped 11 LNG cargoes to date.

Santos’s fourth quarter results come on the back of the company’s announcement in November that it would inject $3.5 billion of capital initiatives to strengthen the balance sheet and reduce debt.

Around the same time, former Clough Chief Executive Kevin Gallagher was appointed to replace David Knox as Santos’s Managing Director and Chief Executive Officer.

Santos Executive Chairman Peter Coates said the company’s fourth quarter results reflect the company’s response to the challenging oil price environment.

He said Santos will continue to review its operational and development plans with a focus on preserving cash.

“Santos is well-placed to withstand an extended period of low oil prices, with $4.8 billion in cash and committed undrawn debt facilities, and no material debt maturities until 2019.

“We are continuing to focus on reducing our capital expenditure and will build upon the significant improvements that we have made to our operating efficiency.”?

Mr Coates said PNG LNG and Darwin LNG operated at record rates during the fourth quarter, while GLNG has ramped up following first LNG in late September.

Leave a Reply

Send this to a friend