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Santos narrows sales, output guidance

AAP logoAAP 21/10/2016

Santos has narrowed its full-year sales guidance to the top end of its previous target range after total sales volumes leapt 31 per cent in the September quarter, compared with the same period last year.

The company now expects total sales volumes of gas, ethane, LNG, condensate, LPG and crude oil of between 81-83 million barrels of oil equivalent (mmboe) in 2016, compared to its earlier estimate of 76-83 mmboe.

Santos has also narrowed overall production guidance to 60-62 mmboe, from 57-63 mmboe earlier.

Chief executive Kevin Gallagher says the update comes as Santos doubled liquefied natural gas sales volumes to 755,500 kilotons in the third quarter, and production volumes by seven per cent to 15.5 million barrels of oil equivalent.

He said the figures reflected a ramp-up in production at it GLNG plant in central Queensland, which produced 1.3 million tonnes of liquefied natural gas, and a strong performance by its Papua New Guinea LNG arm.

The rise in total sales volumes lifted sales revenue by 11 per cent to $US650 million ($A852 million), compared to $585 million in the corresponding period last year.

"We are taking the right steps to ensure Santos becomes a strong and sustainable business, and that mindset guides our decision making as we continue to reduce costs and maintain a strong capital discipline," Mr Gallagher said in a statement.

"Furthermore, our decision to commence oil price hedging reflects our desire to reduce the effect of commodity price volatility."

Santos also cut its full-year capital expenditure guidance to $700 million, from $750 million, after capex fell 53 per cent to $438 million in the year to the quarter.

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