Australia’s Santos Ltd said on Thursday third-quarter revenue slid nearly 23%, hit by a drop in realized gas prices because of the COVID-19 pandemic.
The country’s no. 2 independent gas producer said sales revenue came in at $797 million for the quarter ended September, missing an RBC estimate of $814 million, and lower than the $1.03 billion reported last year.
Santos, like energy producers worldwide, was hit by a sharp decline in oil-linked liquefied natural gas (LNG) prices as excess supply and a pandemic-driven drop in demand hammered crude prices this year.
The Adelaide-based company said its average realized LNG price plunged 48.4% from the previous quarter to $4.27 per metric million British thermal unit (mmBtu) in the three months to September.
However, it expects LNG prices to have bottomed out in the third quarter as countries gradually reopen their economies after lockdowns, reviving energy demand.
Production rose 26.8% to a record 25.1 million barrels of oil equivalent (boe), as Santos increased its share in the Bayu-Undan offshore project near Darwin in northern Australia.
The company’s forecast for 2020 upstream unit production costs was lowered to between $8.25 and $8.75 per boe, Santos added.
($1 = 1.4057 Australian dollars)
(Reporting by Soumyajit Saha and Arpit Nayak in Bengaluru, additional reporting by Nikhil Kurian Nainan; Editing by Bernard Orr and Devika Syamnath)