Australian LNG operator Santos has seen an increase in sales volumes as well as sales revenue on the back of higher LNG prices and the timing of liftings.
Sales volumes reached 21.5 mmboe during the second quarter, 16 percent up from 18.6 mmboe reported in the first quarter. Santos’ s quarterly report shows that in the first six months, the sales volume dipped 2 percent from 40.9 mmboe in 2016 to 40.1 mmboe this year.
Higher LNG prices also had an impact on sales revenue that rose 12 percent quarter on quarter reaching Us$769 million. Sales revenue also rose for the first six months period, up 22 percent from $1.19 billion in 2016 to 1.45 billion this year.
As a result of this solid operational performance, Santos has increased its production and sales volume guidance for 2017 to 57-60 mmboe and 75-80 mmboe respectively.
Speaking of the results, Santos managing director and CEO, Kevin Gallagher said the company made “further progress on reducing costs, lowering net debt and improving the free cash flow position.”
“Compared to the end of 2016, our net debt position is $600 million lower to $2.9 billion and our forecast free cash flow breakeven for 2017 now sits at $33 per barrel, well below the $47 per barrel at the beginning of 2016,” according to Gallagher.
In addition, lower cost operations had enabled Santos to increase drilling activity in both the Cooper basin and across its GLNG acreage, he said.
These additional wells will help boost production over the next few years so Santos can deliver increased gas supply for the domestic market.
Santos noted in its report that sales gas delivered to the Gladstone LNG facility as well as LNG production were lower compared to the first quarter due to the planned four-week statutory inspection shutdown of LNG train 2 in June combined with the processing of GLNG gas at APLNG during their two-train completion test.
The company also said that a planned three-week maintenance shutdown of LNG train 1 commenced in July. The facility shipped 21 LNG cargoes during the second quarter, the same as the previous quarter. In the first six months 2017, Santos GLNG plant shipped 42 cargoes, 10 more compared to the first six months last year.
Planned maintenance also impacted Darwin LNG sales volumes and production which resulted in 12 cargoes being shipped from the facility, two less compared to the first quarter. Year to date, Darwin LNG plant shipped 26 cargoes, three less compared to the corresponding period in 2016.