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Australia’s Santos crude oil output falls Jul-Sep, maintains 2019 guidance

Australian Santos’s crude oil production slipped quarter on quarter in July-September, due in part to natural field decline while it has maintained its 2019 guidance, the company said in its latest quarterly activities report.

The company’s share of crude oil production from its assets — including in Western Australia, the Cooper Basin and Papua New Guinea — was 1.87 million barrels, down 10% from the April-June period and up 28% year on year.

The largest quarter-on-quarter fall came via its Western Australian operations, which slipped 11% to 1.07 million barrels because of the natural field decline, it said.

The year-on-year increase came on the back of Santos’ acquisition of Quadrant Energy’s assets in November last year.

Crude volumes from its Cooper Basin operations also slid. At 791,200 barrels, the production was down 8% quarter on quarter and 12% from the same period last year, it said.

“Crude oil production in the third quarter was lower than the prior quarter due to the expected decline from the Watkins field development and fewer oil wells being brought online as a result of planned program phasing,” it said.

Santos’s share of crude oil production from PNG LNG was down due to damage to a loading buoy late in August. The volume stood at 2,600, having dropped 16% from the June quarter and 30% from the September quarter of last year.

Morgans said in a research note that it expects Santos’ total crude production to be 8 million barrels this year, before climbing to 10 million barrels/year in 2020 and 2021.

Santos said it achieved a price of $70.20/barrel for its crude oil in the September quarter, compared to $79.20/barrel in April-June and $81.09/barrel a year earlier.

NORTHERN AUSTRALIA CONDENSATE OFFSETS FALL

Meanwhile, Santos’s condensate production fell by just 1% from the June quarter in the July-September period, as higher volumes from Northern Australia offset losses at Western Australia, the Cooper Basin and PNG.

The company’s total share of condensate production from the assets was 1.06 million barrels, a 24% increase year on year.

The Western Australian volumes stood at 399,900 barrels, down 5% from the June quarter and up 141% from the September quarter of last year. Cooper Basin condensate production was 236,700 barrels, showing a quarter-on-quarter fall of 3% and year-on-year drop of 6% and PNG edged up 1% from April-June and 14% from last year, it said.

Volumes from Northern Australia rose to 95,800 barrels, having increased 24% from the June quarter and 76% from July-September 2018, it said.

The company attributed the increase in condensate production from Northern Australia to the timing of the shipping schedule and completion of planned maintenance activities at Darwin LNG in the June quarter.

Morgans forecasts that Santos’s condensate production will reach 4 million barrels this year, and then 7 million barrels/year over the next two years.

Santos’s realized price for its condensate sales for the quarter was $57.27/barrel, down from $66.17/barrel in April-June and $71.78/barrel in the September quarter of last year.

Santos left its total 2019 production guidance unchanged at 73 mmboe-77 mmboe.
Source: Platts

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