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.

- Advertisements -

Most Popular

QatarEnergy selects Shell as partner for $28.75 billion LNG expansion project

LNG giant Shell is the latest international firm to join QatarEnergy’s huge LNG expansion project, which will boost Qatar’s...

Italy’s Snam buys FSRU from BW LNG for about $400 million

Italian energy firm Snam has purchased BW LNG’s 2015-built FSRU BW Singapore for $400 million, as part of Italy's...

KSOE reveals contract changes for LNG carrier trio tied to Sovcomflot

Hyundai Samho has terminated contracts for three LNG carriers the shipbuilder won last year from a Liberia-based owner and...

More News Like This

Comet Ridge wraps up Mahalo stake deal with APLNG

Comet Ridge has boosted its stake in the Mahalo gas project after it completed the previously announced deal with...

Australia’s Santos to spend $250 million on GLNG drilling campaign

Australian LNG producer Santos said its GLNG joint venture would spend $250 million to drill and connect more than...

Australia’s Santos inks new domestic gas supply deal with Yara

Australian LNG player Santos said it has signed a new domestic natural gas supply deal with a unit of...

Santos, Jera wrap up Barossa stake sale

Australian LNG player Santos said it has finalized the sale of a 12.5 percent interest in the Barossa project...