Santos of Australia today announced a net profit of $262 million after tax for the half-year ended 30 June 2012.
The headline half-year result is lower than the corresponding period which included gains on asset sales of $246 million.
Underlying net profit of $283 million for the first half is up 20% primarily due to higher gas and liquids prices and sales volumes, partially offset by higher cost of sales and exploration expense.
Chief Executive Officer David Knox said that Santos had lifted production by 11% in the first half, driven by on-time project start-ups, record Western Australian gas production and progress in recovery of production constrained during 2011 by flooding in the Cooper Basin.
“First half production was the highest in three years which combined with higher oil and gas prices has produced a strong first half result. The base business is performing well and we expect production in the second half of the year will be stronger than the first.”
“We also announce today success in our Cooper Basin shale gas program with the Moomba-191 well having flowed dry gas at a stabilised rate of 2.6 mmscf/d. The well is located within 350 metres of the existing gas gathering infrastructure, and connection activities have commenced to provide Australia’s first commercial production of gas from a shale well.”
“Our LNG projects remain on schedule with PNG LNG on track for first LNG in 2014 and GLNG in 2015,” Mr Knox said.
GLNG (Santos 30%)
Construction continues to progress across the integrated project. In the upstream gas fields, construction camps are being progressively occupied and site preparation has commenced at the three gas hub sites at Fairview and Roma.
The 420- kilometre gas transmission pipeline has been manufactured and deliveries of pipe to site have commenced, ready for pipe-lay to start later this year.
On the Curtis Island LNG plant site, construction of LNG trains, tanks and supporting infrastructure is progressing well. In June 2012, the gross capital cost estimate for the project was increased from US$16 billion to US$18.5 billion for the period from the final investment decision until the end of 2015.
The incremental capital will fund additional upstream processing capacity and wells in the Fairview and Roma areas. The revised capital cost estimate is based on foreign exchange rates which are consistent with the assumptions used at sanction.
In particular, this assumes a weighted average A$/US$ rate of 0.87 through to the end of 2015.
PNG LNG (Santos 13.5%)
Construction continues to progress at the upstream, pipeline and LNG plant locations.
In the upstream, the first Hides development well was spudded in July and construction of the gas conditioning plant and Komo airfield is well underway.
The offshore section of the gas transmission pipeline is complete and the onshore section is well advanced. At the LNG plant site, construction is progressing well on the LNG trains, tanks, jetty and supporting infrastructure.
LNG World News Staff, August 17, 2012; Image: Santos