First quarter production was up 15% to 14 million barrels of oil equivalent, sales were up 10% to 15.2 MMboe, while revenue was down 10% due to the fall in global oil prices, partially offset by stronger domestic gas prices and a weaker Australian dollar.

Santos boss David Knox said the company was focused on cost-cutting to improve its margins.

"First quarter capital expenditure was 40% lower than last year, and we continue to make solid inroads towards reducing production costs per barrel across the business," Knox said.

The company is maintaining its production guidance for 2015 of between 57-64MMboe, even though its oil producer was down 22% to 2MMbbl last quarter, primarily due to scheduled dry dock maintenance of the Mutineer-Exeter/Fletcher Finucane FPSO.

Santos' average price per barrel was also down 22% to $72/bbl, but the oil is still profitable given costs are $14.2-14.6/boe.

The impact of the lower price was that oil sales revenue was down 42% to $223 million.

Cooper Basin sales gas and ethane production of 14.9 petajoules was higher than the corresponding quarter reflecting the higher level of drilling activity undertaken throughout 2014 and the resultant increase in well capacity beyond natural field decline, although the Moomba gas hub had downtime as the plant is readies for higher gas demand.

Santos' unconventional gas drilling in the Nappamerri Trough of the Cooper Basin continued with the Gaschnitz-2 appraisal well in PPL 101 drilled to a total depth of 3790m. The well encountered a fully gas saturated Permian section down-dip from Gaschnitz-1ST1 and was cased and suspended for testing.

Lower gas nominations from customers meant Carnarvon Basin gas production was 5% lower to 13.8PJ, but condensate production was slightly higher overall.

Santos participated in 27 LNG cargoes via its shares in the PNG LNG and Bayu-Undan/Darwin LNG projects.

In its controversial CSG project at Narrabri, where Santos is still able to operate, one of the few CSG companies to do so, the Bibblewindi East and West pilots and the Tintsfield pilot are all running and the Wilga Park power station was operating at close to 12MW, driven by natural gas from the Bibblewindi pilots.

Approval documents were submitted to the NSW government for phase two of work at the Leewood water facility outside the Pilliga Forest, which would allow produced water from the appraisal process to be reused for irrigation and construction.

The Environmental Impact Statement for the proposed Narrabri gas project is being finalised.

Production from its interests in Indonesia and Vietnam was stable, although improvements to the FPSO servicing the Chim Sao and Dua fields saw an improvement in Vietnamese oil production to was 29,800 bopd.

During the quarter, Santos also announced a significant oil discovery at the Bestari-1 exploration well offshore Malaysia with 67m of net oil pay over multiple sand packages within the primary Miocene age formation.

The company is participating in two further Malaysian offshore wells, Ehsan-1 for oil and gas and Lawa-1 for gas in the Deepwater Block R PSC.