Impairments drive Santos to net loss

Australian independent LNG producer Santos reported a net loss in the first half as it booked a $526 million hit in asset impairments due to revised oil price outlook.

The firm recorded a net loss of $289 million as compared to a profit of $388 million on previously announced charges mainly related to its GLNG project and exploration assets in the Cooper and Amadeus Basins.

Excluding impairments, the company’s underlying net profit nearly halved to $212 million as the Covid-19 pandemic destroyed demand pushing down prices to record lows.

Santos said its average realised oil price dropped 34% to $47.83/bbl and LNG price decreased 14% to $8.57/mmBtu in the six-month period.

This also lead to sales revenue dropping 16% to $1.7 billion.

On the brighter side, the Australian firm reported a record production boosted by its purchase deal with ConocoPhillips in May which included operating interests in Darwin LNG, Bayu-Undan field, and Barossa and Poseidon projects.

Santos said first-half production reached 38.5 mmboe and maintained full-year production guidance at 83-88 mmboe.

“Our disciplined operating model enabled us to maintain activities key to sustaining strong operational performance and stable production across all of our core assets, and we are now targeting a free cash flow breakeven oil price of less than $25 per barrel in 2020,” Santos chief Kevin Gallagher said.

Despite the oil and gas price crash, Santos still plans to take final investment decisions on its three projects in Australia worth some $6.9 billion.

These include the Barossa field, the Dorado development, and the Moomba carbon capture and storage site.

“Santos remains confident that when prices and demand recover, our projects will be better placed than those in our competitor countries to leverage the opportunities that will inevitably re-emerge,” Gallagher said.

Most Popular

Woodside terminates Commonwealth LNG SPA

Australian LNG player Woodside has terminated its two LNG sale and purchase agreements with US LNG terminal developer Commonwealth LNG.

Thailand in Alaska LNG talks

Thailand's PTT and Egco will engage in further discussions to potentially participate in the development and buy volumes from the planned Alaska LNG project, according to Thailand's Ministry of Energy.

Energy Transfer seals Lake Charles LNG supply deals

Texas-based Energy Transfer has signed new supply deals for its planned Lake Charles LNG export facility in Louisiana as it works to take a final investment decision by the end of this year, according to its management.

More News Like This

Santos: PNG LNG shipped 28 cargoes in Q1

The ExxonMobil-operated PNG LNG project in Papua New Guinea shipped 28 cargoes of liquefied natural gas in the first quarter of 2025, up by one cargo compared to the same quarter last year and one cargo less compared to the prior quarter, according to shareholder Australia’s Santos.

Santos: Barossa project 95.2 percent complete

The Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is 95.2 percent complete and remains on target for first production in the third quarter of 2025, Santos said on Thursday.

Santos says Barossa project 91 percent complete

The Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is 91 percent complete and remains on target for first production in the third quarter of 2025, Santos said on Wednesday.

TotalEnergies CEO says partners working hard on Papua LNG

TotalEnergies has a 37.55 percent operating stake in the Papua LNG project, ExxonMobil has 37.04 percent, Santos owns a...