Reuters Australia
Santos Q2 output falls 11 percent, cuts forecast
Thursday July 24, 04:28 PM
(Adds details, background)
PERTH, July 24 (Reuters) - Australian oil and gas producer Santos Ltd (ASX: STO.ax) on Thursday reported a 11 percent fall in second-quarter production from a year ago and cut its 2008 production by 3.4 percent.
Australia's third-largest oil and gas producer cut its 2008 production guidance to between 54-56 million boe from an April forecast of between 56-58 million boe, due to asset sales and an unplanned shut in of a gas field.
Santos said second-quarter output of 13.9 million barrels of oil equivalent (boe) was up 1 percent from the previous quarter, bringing total output in the first six months to 27.6 million boe versus 30.1 million boe produced in the first half last year.
"Production was impacted by a planned workover campaign on Mutineer-Exeter and the shut-in of John Brookes," Santos said in a statement.
Output from the Mutineer-Exeter oilfield off western Australia has been badly hit following an equipment failure last year.
Santos said the field was producing at a rate of about 10,000 barrels per day (bpd) at the end of the quarter and an improvement programme, which began in June, was expected to boost production.
The John Brookes gas field off western Australia was shut in following an explosion at Apache's APA.N Varanus gas plant in June. Santos, which has a 45 percent stake in the field, said last month that the shut in was expected to cut its 2008 output by about 1.2 million boe.
Santos said the 40 percent sale of its proposed Gladstone liquefied natural gas (LNG) project to Malaysia's Petronas [PETR.UL] would cut its 2008 output by 0.5 million boe, while higher prices have also cut its Bayu-Undan net production entitlement by about 0.3 million boe.
Shares in Santos fell as much as 5 percent to A$16.70. It was down 4 percent at A$16.88 by 0406 GMT, compared with 2.5 percent decline in the broader S&P/ASX 200 Energy index .AXEJ.
Sales revenue for the April-June quarter rose 18 percent from a year ago to a record A$749 million ($720.2 million).
Capital expenditure for the year was expected to stay at about A$1.5 billion.
Santos also said it found oil shows at its Chim Ung well off Vietnam, with tests showing 10 metres of net oil pay. ($1=1.040 Australian Dollar) (Reporting by Fayen Wong)
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