Resurgent Santos Overshadows Woodside

Woodside Petroleum and Santos produced very different quarterly reports yesterday.

Woodside told the ASX that its third-quarter revenue was flat thanks to weak LNG prices which offset higher output from its Pluto and Greater Enfield liquefied natural gas projects off the NW WA coast.

Santos revealed a 5% rise in revenue for the third quarter and seems to be a bit more upbeat about the outlook.

Woodside said in its report that third-quarter sales revenue was $US1.16 billion ($A1.72 billion) on production of 24.9 million barrels of oil equivalent (mmboe) during the period, up from the 23.1 mmboe it churned out in the same period last year.

The average realised price for its products was $US50 per barrel of oil equivalent (boe), down from $US55 per boe a year earlier.

However, sales revenue and production both surged against the preceding quarter, up 58% and 44% respectively, as a number of major projects commenced output.

The Pluto project, which achieved record daily production rates and quarterly output, showed “outstanding reliability” following maintenance, Woodside said.

Chief executive Peter Coleman said the company was confident that its biggest spend, the Browse project off Australia, would be ready to begin preliminary engineering work in the fourth quarter of FY19.

“We are progressing the negotiation for the Browse gas processing agreement,” he said in a statement.
Woodside shares rose 0.6% to $32.12.

Santos has reported a 5.9% rise in third-quarter revenue, benefiting from higher gas prices and domestic sales.

Revenue rose to $US1.03 billion ($A1.52 billion and the second-highest on record) for the three months ended September 30 from $US973 million a year earlier.

Production surged 32% to a record 19.8 million barrels of oil equivalent (mmboe), higher than market estimates of 18.9 mmboe.

Santos CEO, Kevin Gallagher said it was another strong quarter for Santos, highlighted by record production and sales volumes, and the second-highest quarterly sales revenue on record.

“Santos continues to generate strong free cash flows from the consistent application of our disciplined operating model.”

“Another highlight of the quarter was the successful appraisal of the Dorado field which is one of the most exciting growth projects in our portfolio. Following the strong well test results, we are targeting FEED-entry in early 2020.”

“The acquisition of ConocoPhillips’ northern Australia interests announced earlier this week delivers shareholders operatorship and control of long-life, low-cost natural gas assets, and strategic LNG infrastructure aligned to our brownfield growth strategy.

“Santos is keen to work with our joint venture partners to achieve alignment to support our Barossa development and to facilitate the future development of the vast discovered resources offshore and onshore Northern Territory,” Mr. Gallagher said.

Santos shares were up half a percent to $7.85.

A solid rise in world oil prices overnight Wednesday and into Thursday helped lift the share prices of both companies yesterday in a wider market that lost 0.8%.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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