Santos reports lower revenue, production

Australian gas producer and GLNG operator Santos posted a 13 percent decline in revenue, affected by the slump in oil and gas prices.

The company’s sales revenue for the January-March quarter fell to $883 million from $1.02 billion a year ago.

It produced 17.9 million barrels of oil equivalent during the period, down from 18.4 mmboe last year.

Average LNG prices amounted to $8.88 per metric million British thermal unit, compared to $10.79 per mmBtu a year earlier, Santos said on Thursday.

However, Santos sees a big boost from strong gas production in the Cooper basin, GLNG terminal and fixed-price contracts.

These are helping the company remain confident it can weather the demand slump caused by the Covid-19 coronavirus pandemic.

Santos head Kevin Gallagher said “decisive action is being taken to ensure Santos is well-positioned in a lower oil price environment”.

“The current environment is a time for discipline. We have a strong liquidity position with over $3 billion available and we have sufficient headroom in our debt covenants for a number of years at current oil prices,” he said.

Santos is targeting a free cash flow breakeven oil price of $25 a barrel in 2020.

Brent crude, the global oil price benchmark, dropped by 10 percent this month so far to $20.37 a barrel. The price declined by 69 percent this year so far.

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