Santos' Q2 sales revenue plunges 29%

Australian gas and LNG producer Santos on July 20 reported a significant 29% year/year drop in sales revenue. The decline was primarily attributed to reduced commodity sales volumes and lower realised prices in the energy market.

During the second quarter of 2023, Santos recorded sales revenue of $1.34bn, a decrease from $1.88bn in the same period last year. The sales volume was 23.3mn barrels of oil equivalent (boe) compared with 27.6mn boe in the corresponding quarter of the previous year.

The average realised LNG price during the quarter dropped to $11.96/mn British thermal units, compared with $14.66/mn Btu reported in the previous year. Additionally, the average realised crude oil price suffered a sharp decline, dropping to $82.91/barrel from $119.5/barrel.

The production volume for Santos during the second quarter also declined to 22.8mn boe, down from 25.5mn boe in the same quarter of the previous year. This decrease in production prompted Santos to revise its production guidance for the full year. The company now expects to produce between 89mn boe and 93mn boe in 2023, compared with the previously estimated range of 89mn boe to 96mn boe.

Santos said that the Barossa project remains 66% complete, excluding the Darwin pipeline duplication project. However, drilling activities at the Barossa project remain suspended as the regulator NOPSEMA (National Offshore Petroleum Safety and Environmental Management Authority) assesses and accepts the environment plan. Santos stated that there is a possibility for drilling activities to recommence before the end of the year, with the aim of maintaining the project's schedule for the first production in 2025.

Barossa's gas supplies are intended to extend the life of Santos's 3.7mn tonnes/year Darwin LNG facility in the Northern Territory. The $3.6bn Barossa programme got underway with the project's final investment decision last March.