Santos shares rise despite profit dip

Rising development costs have dragged down profits for oil and gas producer Santos.

The company has reported a 31 per cent slide in full-year profit to $519 million.

In response, Santos says it is focused on reducing costs and cut its workforce by more than 100 staff over the year.

Santos chief financial officer Andrew Seaton says development costs should start to fall soon.

"The 2012 result was lower than we envisaged due to timing of expenditure across the broader portfolio," he said.

"Our forecast 2013 spend of circa $4 billion will represent the peak year of capex ahead of the start up of PNG LNG in 2014 and GLNG [Gladstone LNG] in 2015." Santos says the New South Wales Government's legislation against coal seam gas exploration in some areas does not affect its plans.

This week the New South Wales Government announced a two kilometre coal seam gas exclusion zone around current and planned residential areas.

The company's chief executive David Knox says the changes to exploration rules will not change the company's plans.

"The area we really want to start developing is in the Pilliga Forest, and that area is unaffected by the two kilometre zone," he said.

"What we are intending to do is start basically doing an evaluation and appraisal wells into that area."

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9264-0.0023-0.25%
    AUDUSD=X
    0.5517-0.0018-0.32%
    AUDGBP=X
    0.6701-0.002-0.29%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg