Xinhua, Sydney :
Significant asset impairments from slumping oil price have seen Australia’s oil and gas producers suffer severe losses in 2015, however they are confident that they withstand the prolonged slump.
Santos Ltd. on Friday announced a 2.7 billion Australian dollar (1.92 billion U.S. dollar) net loss, which was significantly impacted by a 2.8 billion Australian dollar (1.99 billion U.S. dollar) after tax asset write-down, despite cutting capital expenditure by 54 percent to 1.7 billion Australian dollar (1.21 billion U.S. dollar).
The impairment charge isn’t expected to impact on Santos investment grade credit rating, the company said.
Australia’s third largest oil and gas producer said underlying profit in the year ending Dec. 31 was 50 million Australian dollars (35.57 million U.S. dollars), a 91-percent fall on 2014, as its 7 percent increase in production was decimated by a 48 percent fall in average realized oil price to 54 U.S. dollars per barrel, causing a 20 percent fall in sales revenue. Net debt stands at 6.5 billion Australian dollars (4.62 billion U.S. dollars).
“Santos is well placed to withstand an extended period of low oil prices, with more than 4.8 billion Australian dollars in cash and committed undrawn debt facilities at the end of 2015 and no debt maturities until 2019,” the company said in its report to the Australian Securities Exchange (ASX).
Santos’ shares fell 15 Australian cents (10.67 U.S. cents), or 4.24 percent to 3.39 Australian dollars (2.41 U.S. dollars), a more than 50 percent drop over the year.
Santos is predicting oil prices to rebound to 70 U.S. dollars by 2018, forecasting 40 U.S. dollars per barrel in 2016, benchmark Brent crude traded 34.28 U.S. dollars a barrel overnight, which is at odds of Australia’s largest oil and gas producer Woodside Petroleum Ltd.
Woodside on Wednesday said the deep uncertainty of global oil prices was weighing on the prospects for its key Browse project off Western Australia state as it reported a 99 percent fall in full-year profit, saying its unclear whether the oil rout is a short-term low or a fundamental shift in the market.
“What’s not clear to me today is to win the middle of a fundamental structural change in the industry or is this just a short term disruption, where we’ll go back to long term trends in a relatively short period of time,” Woodside chief executive Peter Coleman told reporters on Wednesday.
The company’s full year profit stood at just 26 million U.S. dollars after suffering a 1.2 billion U.S. dollar asset write down which was flagged in January, a major slump on 2.4 billion U.S. dollar profit in the prior year, Woodside’s second largest on record.
A decision on whether the company’s key Browse floating LNG project, worth an estimated 30 billion Australian dollars, would go ahead is due in the second half of 2016, however Coleman said customers for the projects LNG had not been secured and cuts in the oil price outlook had offset any cost reductions.
“This is not the time to be reckless at all with respect to capital deployment. And this is not the time to make bets the future is going to be rosier just simply because we hope it will be,” Coleman said.
Late last year Woodside walked away from a takeover proposal for Papua New Guinea centric Oil Search after their original proposal was rejected, saying any cash included in its original offer of one to four share ratio would have been bad for its shareholders should oil prices continue to fall.
Significant asset impairments from slumping oil price have seen Australia’s oil and gas producers suffer severe losses in 2015, however they are confident that they withstand the prolonged slump.
Santos Ltd. on Friday announced a 2.7 billion Australian dollar (1.92 billion U.S. dollar) net loss, which was significantly impacted by a 2.8 billion Australian dollar (1.99 billion U.S. dollar) after tax asset write-down, despite cutting capital expenditure by 54 percent to 1.7 billion Australian dollar (1.21 billion U.S. dollar).
The impairment charge isn’t expected to impact on Santos investment grade credit rating, the company said.
Australia’s third largest oil and gas producer said underlying profit in the year ending Dec. 31 was 50 million Australian dollars (35.57 million U.S. dollars), a 91-percent fall on 2014, as its 7 percent increase in production was decimated by a 48 percent fall in average realized oil price to 54 U.S. dollars per barrel, causing a 20 percent fall in sales revenue. Net debt stands at 6.5 billion Australian dollars (4.62 billion U.S. dollars).
“Santos is well placed to withstand an extended period of low oil prices, with more than 4.8 billion Australian dollars in cash and committed undrawn debt facilities at the end of 2015 and no debt maturities until 2019,” the company said in its report to the Australian Securities Exchange (ASX).
Santos’ shares fell 15 Australian cents (10.67 U.S. cents), or 4.24 percent to 3.39 Australian dollars (2.41 U.S. dollars), a more than 50 percent drop over the year.
Santos is predicting oil prices to rebound to 70 U.S. dollars by 2018, forecasting 40 U.S. dollars per barrel in 2016, benchmark Brent crude traded 34.28 U.S. dollars a barrel overnight, which is at odds of Australia’s largest oil and gas producer Woodside Petroleum Ltd.
Woodside on Wednesday said the deep uncertainty of global oil prices was weighing on the prospects for its key Browse project off Western Australia state as it reported a 99 percent fall in full-year profit, saying its unclear whether the oil rout is a short-term low or a fundamental shift in the market.
“What’s not clear to me today is to win the middle of a fundamental structural change in the industry or is this just a short term disruption, where we’ll go back to long term trends in a relatively short period of time,” Woodside chief executive Peter Coleman told reporters on Wednesday.
The company’s full year profit stood at just 26 million U.S. dollars after suffering a 1.2 billion U.S. dollar asset write down which was flagged in January, a major slump on 2.4 billion U.S. dollar profit in the prior year, Woodside’s second largest on record.
A decision on whether the company’s key Browse floating LNG project, worth an estimated 30 billion Australian dollars, would go ahead is due in the second half of 2016, however Coleman said customers for the projects LNG had not been secured and cuts in the oil price outlook had offset any cost reductions.
“This is not the time to be reckless at all with respect to capital deployment. And this is not the time to make bets the future is going to be rosier just simply because we hope it will be,” Coleman said.
Late last year Woodside walked away from a takeover proposal for Papua New Guinea centric Oil Search after their original proposal was rejected, saying any cash included in its original offer of one to four share ratio would have been bad for its shareholders should oil prices continue to fall.
