Santos flags $690 mln impairment charge

Santos flags $690 mln impairment charge
Santos GLNG plant (Image courtesy of Santos)

Australian LNG operator and stakeholder, Santos, expects to book a $690 million impairment charge for the first half of the year. 

Santos lowered its Brent oil price forecasts to $50/bbl in 2017, 55/bbl in 2018, $60/bbl in 2019, $65/bbl in 2020, $70/bbl in 2021 and $70/bbl (real 2017) from 2022.

Resulting from the changes in assumptions and the lower oil prices, the company expects a write-down of $870 million in the value of its Gladstone liquefied natural gas project.

Lower oil price assumptions also impacted the Cooper Basin assets, however, this is more than offset by a continuation of the cost efficiencies and performance improvements achieved during 2016 allowing increased drilling activity and production, Santos said.

The company added that this resulted in an expected positive net write-back to the Cooper Basin carrying value of approximately $330 million after tax.

Santos also expects to take an impairment charge against the non-core AAL asset in Indonesia of approximately $150 million after tax following an assessment of the impact of lower oil prices.

 

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