Santos reports loss in the face of record sales

Santos reported a net loss of $925 million in their 2014 full year results, and in response have frozen recruitment and payrises.

However, the company has also reported an underlying net profit of $533 million, a six per cent increase on 2013.

CEO David Knox said the company’s progress was significant despite the loss, and had delivered its highest production in five years, up six per cent to 54.1 million barrels of oil equivalent (mmboe).

The gas producer declared proved plus probable petroleum reserves of 1245 mmboe as at the end of 2014, a decline of 123 mmboe as a result of reassessment in the Gunnedah Basin.

“Our results today reflect the many achievements of the company in 2014, highlighted by the start-up of PNG LNG ahead of schedule and the commencement of commissioning of the GLNG project,” Knox said.

The GLNG gas processing plant on Curtis Island is now at 90 per cent complete, according to the full year report.

“The underlying performance of our business remains strong and we look forward to further production growth in 2015 with the start-up of GLNG in the second half of this year, within the US$18.5 billion budget,” Knox said.

“The bottom line result nevertheless reflects the impact of the unexpectedly sharp down-turn in oil prices towards the end of the second half in particular which saw us recognise significant non-cash asset impairments announced earlier this month.”

Overall sales revenue was up 12 per cent to a record of $4 billion, due to the ramp-up of production at PNG LNG and Cooper Basin production, despite the offset of oil prices.

Production costs averaged about $16 per barrel.

Knox said capex for 2015 was forecast at $2 billion, 44 per cent lower than in 2014.

Net debt increased by $2.6 billion to $7.5 billion.

Santos shares, currently $8.10 (10:44am) took a dive at the start of December 2014, plunging from $12 to $7 in two weeks as a result of plummeting oil prices.

The final dividend was maintained at 15 cents per share, which brought the full year dividend to 35c, and increase of 5c on 2013.

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