Adelaide-based LNG player Santos on Friday reported a 31 percent jump in third-quarter sales reaching 21.3 mmboe on the back of increased production.
LNG sales volumes more than doubled to 755,500 tons, reflecting the ramp up in GLNG LNG production and the “strong performance from PNG LNG,” Santos said in its quarterly report.
The company’s revenue for the quarter increased 11 percent to US$650 million due to the higher sales volumes. However, Santos noted that the higher sales volumes were offset by lower realized oil and LNG prices.
Santos managing director and chief executive officer Kevin Gallagher said the company has decided to commence oil price hedging in order to reduce the effect of commodity price volatility.
Initial transactions under the hedging policy have been undertaken and to date, the company has hedged 7.3 million barrels of oil in the calendar year 2017 using a zero-cost three-way collar structure.
Santos further narrowed its 2016 production guidance to 60-62 mmboe with sales volumes expected to be between 81 and 83 mmboe. Capital expenditures guidance is also reduced to US$700 million.
GLNG ships 21 cargoes in the quarter
The GLNG facility on Curtis Island near Gladstone produced 1.3 million tons of LNG during the quarter and shipped 21 LNG cargoes, taking the total to 60 LNG cargoes since start up in September 2015.
Santos added that the LNG Train 1 has been shut down for a planned 3-week statutory inspection, commencing in early October.
Darwin LNG facility produced 830,000 tons of LNG during the quarter shipping 13 cargoes.
The PNG LNG plant produced 2 million tons of LNG shipping 27 cargoes in the quarter.