Oz Santos Q1 Revenue Drops 13%

Australian oil and gas explorer Santos April 23 reported a 13% yr/yr drop in revenue for the three months to March 31 (Q1 2020) owing to lower sales volume and a drop in realised oil price.

Santos’ revenue during the quarter fell to US$883mn from US$1.02bn a year ago. The average realised oil price in Q1 was US$63.8/barrel, down 3% yr/yr. The company said it is targeting 2020 free cash flow breakeven oil price of US$25/b.

The company's production was 17.9mn barrels of oil equivalent during the period, down from 18.4mn boe last year. Cooper Basin gas production was the highest in nine years driven by strong flow rates from new wells. The Cooper Basin produced at an annualised rate of 17.6mn boe in the quarter, achieving the 2025 production growth target range ahead of expectations, Santos said. GLNG produced at an annualised rate of 6.4mn metric ons/year in the quarter.

Santos’ sales volume stood at 22.3mn boe as against 22.8mn boe in the same quarter of last year. Production guidance from the full year is maintained at 73-80mn boe, it said. Santos CEO Kevin Gallagher said for the remainder of 2020, around 70% of the forecast production volumes are either fixed-price domestic gas contracts or oil hedged at an average floor price of US$39/b.

Last month, Santos announced a 38%, or US$550mn reduction in 2020 capital expenditure in response to Covid-19 outbreak and collapse in oil prices.