While production was up by 12% on the June quarter – thanks largely to new production from Bayu-Undan – it was still 11% down on the corresponding period last year. However, higher oil prices still set Santos up for increased revenue, which was more than $420.3 million, almost $34 million more than in the same quarter last year and up by 26 per cent compared with the June quarter.
Santos said it had now recovered from ‘the Moomba incident’, in which a debilitating fire surged through sections of the company’s natural gas plant in central Australia, and production would continue to rise.
“Lower third quarter production was due mainly to reduced Cooper Basin gas and liquids production as a result of the Moomba incident and lower firm contracted demand,” said Santos managing director John Ellice-Flint.
“The Moomba plant was fully recommissioned during the third quarter. Losses during the quarter will be included in the company’s insurance claim.”
Ellice-Flint said Santos’ had production outlook for 2004 remained unchanged at 45 to 46 million boe despite higher production losses than first anticipated from the Moomba incident.
Santos said significant progress on key growth projects had been made during the third quarter.
In the Bayu-Undan LNG project the pipeline to connect the field to the Darwin LNG plant was now 63% complete, while the LNG plant was 59% complete and on schedule for early 2006 start up.
In the offshore Carnarvon Basin, the Mutineer-Exeter oil field development in the was now more than 75% complete while the John Brookes gas field project (offshore WA) was moving towards first production in mid 2005. An additional gas sales agreement with EDL had been signed supplementing volumes under the Newcrest contract.
The Casino gas field development in the offshore Otway had progressed to formal sanction with the signing of an expanded gas sales agreement with TXU. Increased volumes available under the contract had enabled additional exploration drilling which was now underway.
Santos has also increased its exploration activities. Several potentially high impact exploration wells had been spudded and more were planned for the fourth quarter.
The successful Torres-1A well in the US was recently brought onto production. And the Jeruk-2 well in East Java, which was drilling in the third quarter, was tested in the opening weeks of October with an encouraging flow of 7,488 barrels of 33 API oil per day through a 1/2 inch choke at a flowing pressure of 2,762 psi.