The company’s quarterly activities report showed that production fell from 15 million barrels of oil equivalent in the third quarter of last year to 14MMboe in the fourth quarter, a 6% drop.
When compared with the fourth quarter of 2006, the decline was even worse, a 9% drop from 15.4MMboe. However, Santos pointed out that the Q4 2006 figures had set a company record, and said production was still in line with 2007 guidance.
Despite the fall in production, revenue rose 3% from $A627 million in the third quarter of last year to $647 million in the fourth quarter. However, this figure was down 3% from the $664 million achieved in Q4 2006.
In a full-year comparison between 2006 and 2007, production fell 3% (down from 61MMboe to 59.1MMboe) and revenue fell 10% (down from $A2.75 billion to $2.489 billion).
Changes in revenue reflected not only shifts in production but also higher realised gas prices across Australia and higher oil prices. However, much of this was offset by the higher Australian dollar.
Despite the year-on-year drops in production and revenue, Santos was bullish about the near future in a statement released this morning.
“2007 was a year of significant achievement for Santos, with the removal of the 15 percent shareholder cap, the announcement of the Gladstone LNG project, positive progress on the PNG LNG project, and first oil from the Oyong development,” managing director John Ellice-Flint said.
“At the same time, we have sanctioned our next wave of developments, including the Kipper Gas project in the Gippsland Basin, the Henry Gas project in the Otway basin and Phase 2 of the Oyong field development in Indonesia.”
In addition, front-end engineering and design has been completed for the Reindeer gas field development in Western Australia’s Carnarvon Basin, and project sanction is expected during the first half of this year.
The company said its priority for 2008 was to continue to invest in major growth initiatives.
“Santos is well positioned with large contingent resources and is well placed to leverage the growing regional demand for cleaner fuels,” Ellice-Flint said.
“The year ahead will be defined by progress across our LNG portfolio, in particular the Gladstone LNG and PNG LNG projects.”
