Santos Ltd. said on July 18 it had clocked record gas production in the second quarter on stronger output across its Western Australia gas assets.
Production for the three months to June 30 rose to 18.6 million barrels of oil equivalent (MMboe) from 14.2 MMboe last year, the company said. The figure was higher than a Citi estimate of 17.78 MMboe.
The company, however, slightly trimmed the upper end of its 2019 sales and production forecast, while raising the lower end. Santos now expects annual sales of 90 MMboe and 97 MMboe and production of 73 MMboe to 77 MMboe.
LNG prices have come under pressure after a mild winter in the northern hemisphere. Sales for the period declined slightly from the first quarter, bringing in revenue of $959 million. Santos also realized lower prices over the quarter.
The company said it expects to book a "significant" resource upgrade on its Dorado project in Western Australia. Dorado has been touted as having much potential for the company.
The company's operations in Papua New Guinea may come under regulatory scrutiny after the region's recently elected Prime Minister, James Marape, promised reforms to wealth distribution in the resources sector.
Santos had recently bought into an Exxon Mobil Corp.-led field in Papua New Guinea that will help feed an expansion of Exxon's PNG LNG project, which Santos also partially owns.
Santos' Australia and Papua New Guinea locations help the company sell gas to a number of Asian buyers.
Woodside's Pluto Roadblock
Woodside Petroleum Ltd. reported a 32% drop in second-quarter revenue on July 21, the first decline in six quarters, as it was hit by an extension of planned maintenance at its Pluto LNG facility and weaker prices.
The country's largest listed oil and gas explorer said production for the quarter ended June 30 fell to 17.3 MMboe from 22.1 MMboe a year earlier. The latest quarter production figure was above Citi estimates of 16.33 MMboe.
Sales fell to $738 million from $1.08 billion, below Citi estimates of $793 million.
Last month, the company said it expected annual production to be at the lower end of its forecast range of 88 MMboe to 94 MMboe on maintenance extension at its Pluto plant.
The company said it started commissioning activities at the $1.9 billion Greater Enfield oil project off Western Australia. Woodside operates the Greater Enfield project and has a 60% stake, while Mitsui E&P Australia Pty Ltd., a unit of Japanese trading house Mitsui & Co, owns the remaining 40%. In March, Woodside CEO Peter Coleman said the company was slowing down marketing for the Scarborough development in Western Australia, despite a lot of interest for the gas, due to weak prices of Asian LNG.
Coleman had also said he was worried about companies approving new LNG projects without lining up long-term contracts, potentially weighing on prices when they start producing in the mid-2020s.