Oil prices contribute to Santos’s 2.7b loss

Santos Chairman Peter Coates said the business delivered its highest production in seven years.

Santos Chairman Peter Coates said the business delivered its highest production in seven years.

Santos has announced a 2015 net loss of $2.7 billion, in a reflection of the current oil price environment and the company’s gas-producing assets in Cooper Basin, GLNG and Gunnedah Basin.

According to its 2015 full-year results that were released today, Santos’s underlying net profit after tax dropped by 91 per cent to $50 million, and sales revenue plummeted by 20 per cent to $3.2 billion.

“Despite the continued pressure on the oil price, operationally the business performed well in 2015 with Santos delivering its highest production in seven years, best safety performance on record and the successful start-up of the GLNG project which has shipped 16 cargoes to date,” Santos Chairman Peter Coates said.

Santos’s GLNG project started up on schedule, with train 1 production exceeding 110 per cent of nameplate capacity and 16 cargoes shipped to date.

While the average LNG selling price of US$$8.94 per MMbtu was 40 per cent lower than the previous year, LNG sales revenue was up over 40 per cent following the start-up of GLNG and strong performances from Santos’s PNG LNG and Darwin LNG plants.

Mr Coates said the actions the company took in 2015 to strengthen its balance sheet and lower its cost base have put Santos in a stronger position to withstand the low oil prices.

“The company raised $3.5 billion, reduced capital expenditure by 54 per cent below 2014 levels and lowered production costs per barrel by 10 per cent.

“With $4.8 billion in cash and committed undrawn debt facilities and no material drawn debt maturities until 2019, Santos is well placed to deal with the short-term challenges.”

Santos maintains an investment grade credit rating from Standard & Poor’s.

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