Santos has advised the market of a massive $1.564 billion non-cash impairment charge in its latest accounts.
It has estimated an impairment charge before tax of $2.356 billion.
The energy company has been rocked by the recent sharp falls in the oil price, which has seen the industry cutting back and suffering major losses across the board, even though the plateau seems to have been reached.
Globally drillers are beginning to shut down operations and make rigs non-operational.
According to Baker Hughes the average oil rig countis expected to fall around 15 per cent in the first quarter of 2015, compared to the last quarter of 2014, as operators look to focus on their highest performing wells instead of those with lower output.
But even with this, rig costs still remain high, with an average daily rate for floating drillships ranging between US$257,000 to US$520,000, while semi-submersible rates range between US$288,000 through to US$441,000.
These high production costs have seen majors such as BP record large quarterly losses, with the company announcing a US$4.4 billion loss this week.
Now Santos has joined other players in writing down losses on the back of these weakened oil prices.
"The $1.564 billion impairment charge reflects the lower oil price environment and is a non-cash accounting adjustment that relates to the historical book value of the company's assets," Santos said in a company statement.
"In undertaking the impairment analysis, Santos has used a future oil price estimates which assume short-term market prices for four years, reverting to a long term price of US$90 real from 2019."
For its impairment analysis Santos estimated brent oil prices at US$55 per barrel in 2015, US$70 per barrel in 2016, US$80 per barrel in 2017, and an eventual price plateau of US$90 per barrel from 2018 onwards.
In some positive news for the company "there is no impairment of GLNG, which is on track for first LNG in the second half of 2015," Santos added.