Santos has taken a spectacular financial hit reporting a full-year $935 million loss, in stark contrast to the company’s reported $516 million profit the year before.
The company says it has completed 90 per cent of its GLNG project on Curtis Island near Gladstone, with first LNG expected to be ready for export in the later half of this year.
Despite the disappointing result on the balance sheet, Managing Director and Chief Executive Officer of Santos, David Knox, remained upbeat saying that while the loss resulted from slumping oil prices and assest writedowns, the company had big things in the horizon.
“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 the GLNG project,” Mr Knox said in a statement.
“Santos also delivered its highest production in five years, record sales revenue and strong operating cash flow.
“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.
“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.
“We will continue to proactively manage our costs, both capital and operating, in line with the current market environment. Capital expenditure in 2015 is forecast at $2 billion, 44% lower than 2014, and we expect to reduce production costs per barrel by 10%. Costs will be tightly managed as we work through the current oil price environment,” Mr Knox said.