Commentary - Santos

Production
52.1 mmboe
Santos’ 2012 production was 10% higher than in 2011, driven by new
producing assets and strong performance from the base business.
Total crude oil production of 7.2 mmboe was up 33% on the previous year,
reflecting a full year of oil production from Chim Sáo, Vietnam, and a successful
drilling campaign over the past 12 months in the Cooper Basin.
Total sales gas, ethane and LNG production of 38.3 mmboe was up 8%, driven by
the highest-ever production from the Carnarvon Basin due to strong production
from the Spar and Reindeer fields. Condensate and LPG production was in line
with the previous year.
Sales gas, ethane and LNG 38.3
Crude oil 9.5
Condensate 2.7
LPG 1.6
In 2013, Santos is forecasting production of between 53 and 57 mmboe,
with the increase driven by forecast strong production from the base business
and the start-up of the Fletcher Finucane oil project in Western Australia in
mid-2013.
sales
61.0 mmboe
Sales gas, ethane and LNG 44.1
Crude oil 12.3
Condensate 3.0
LPG 1.6
Sales volumes of 61.0 mmboe were up 4%, with crude oil sales increasing
by 43% due to higher equity production and higher third-party Cooper oil
purchases. Gas sales declined slightly with lower sales from Indonesia, Cooper
Basin and Victorian assets partially offset by higher sales from Reindeer and
John Brookes in Western Australia.
Santos continued to grow its third-party sales business during the year,
primarily in Eastern Australia. In 2012, Santos sold a record 9.9 mmboe of
third-party gas, oil, condensate and LPG, generating a before-tax profit of
$60 million. Sources of third-party gas include Cooper Basin gas produced
by others, gas produced from the Longtom field and processed at Santos’
Patricia-Baleen plant, and the non-Santos share of gas produced in
the GLNG acreage which is sold domestically.
sales revenue
$3,220 million
Sales revenue of $3,220 million in 2012 was a record high for Santos, and was
up 18% on the previous year. Sales revenue from oil was up more than 40%,
driven by strong growth in the company’s oil production and favourable oil
prices during the year. Santos also recorded higher sales revenue for natural gas
and ethane, condensate and LPG in 2012. LNG sales revenue was slightly lower
primarily due to the planned shutdown of the Darwin LNG plant during 2012.
Sales gas, ethane and LNG 1,319
Crude oil 1,401
Condensate 321
LPG 179
The average gas price increased from $4.71/GJ to $5.14/GJ, driven by higher
priced gas sales from Reindeer and Wortel, along with the favourable Maleo price
review. Crude oil prices were in line with 2011, with the average realised price in
2012 of US$117.83.
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