Australian power producer Santos Ltd. reported on Thursday $1.631 billion in sales revenue for the first three months of 2023, down 13 percent from the final quarter of 2022 amid similar declines in production and sales volumes.
It produced 22.2 million barrels of oil equivalent (MMboe) in the first quarter, down 13 percent from its production in the fourth quarter of 2022. Santos sold 23.8 million boe between January and March of 2023, 12% less than the previous quarter.
“First quarter sales volumes were lower than the prior quarter, primarily due to lower domestic gas sales from Western Australia, partially offset by higher crude oil and condensate volumes due to the timing of the uprisings ” the Adelaide-based company said in a filing with the Australian Stock Exchange.
Lower liquefied natural gas (LNG) and oil prices also helped dampen performance. Santos’ average realized price for LNG fell to $14.46 per million British thermal units (MMBtu) from $16.92 per MMBtu quarterly. Crude fell from $94.71 a barrel to $87.59.
The company particularly pointed to a quarterly price difference of $13 per barrel for backlog LNG contracts sold at the Japan Customs Duty Crude (JCC) price, as well as smaller average spot prices in East Asia.
“Three-month-lagged JCC averaged US$100/bbl [barrel] in the first quarter of 2023 compared to US$113/bbl in the fourth quarter of 2022,” it said.
“The Santos LNG projects shipped 56 cargoes in the first quarter, of which four were sold in relation to JKM (Darwin LNG 1, PNG LNG 3),” the company added, referring to the benchmark price Japan Korea Marker used in China. , Japan, South Korea and Taiwan.
LNG had the largest share of revenue at $1.069 billion from 1.4073 million metric tons sold, followed by domestic gas and ethane sales at $264 million from 40.1 petajoules sold. Oil contributed $181 million of the 2.0685 million barrels sold to be the third largest source of revenue.
“Production and sales of domestic gas and associated liquids were lower than the previous quarter due to the temporary shutdown of the John Brookes platform at the end of 2022 and the reduction in capacity of the Rennes field due to increase in water production,” explained Santos.
While the Rennes field could reach the end of the field’s life this year or early 2024, the John Brookes pipeline restarted gas production in February after remediation and the Spartan gas field in Santos is on track on track for launch in the second half of 2023, according to the earnings report. said
Santos has conducted seismic surveys for further hydrocarbon development in the Bonaparte and Bedout basins. But managing director and managing director Kevin Gallagher also said the company is undertaking decarbonisation projects to increase its revenue base.
“The Moomba CCS [carbon capture and storage] The project, which will be one of the largest in the world, is 60% complete and on track for the first injection of CO2 next year. We have also established a partnership with Osaka Gas to investigate the feasibility of carbon-neutral synthetic e-methane from green hydrogen in the Cooper Basin,” he said.
Santos reported $720 million of free cash flow in the first quarter. It had spent $564 million on capital expenditures. The company also recorded $39.08 million (AUD$58,186,592.59) in debt for nearly 8.34 million shares canceled between March 27 and April 14. for repurchaseaccording to a stock exchange disclosure Thursday.
Santos has maintained its forecast figures for 2023, which it said will be revised based on the expected sale of five percent of its 42.5 percent stake in the Papua New Guinea LNG facility. Production for the year is set at 89-96 MMboe.
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