Santos profit slides 24 pct despite record sales revenue

Australian oil and gas producer Santos announced a 24- percent drop in first-half net profit to 206 million Australian dollars (191 million U.S. dollars) on Friday despite a major boost in revenue.

The company said increased production and higher prices drove sales revenue up 25 percent to a record 1.9 billion Australian dollars (1.77 billion U.S. dollars) for the half, and the sales figures were boosted by its LNG project in Papua New Guinea commencing ahead of schedule.

Santos has a 13.5 percent stake in the 19 billion Australian dollars (17.68 billion U.S. dollars) PNG LNG project.

The company said the 2014 first half result reflects record sales revenue driven by higher crude oil and LNG sales volumes, and higher oil and gas prices.

However, this was offset by a write down of the company's Indonesian coal-seam gas assets, and higher cost of sales, exploration expense and net finance costs.

Santos said the start-up of PNG LNG and receipt of first cash from the project had enabled the company to substantially increase returns to shareholders through a 33-percent increase in the interim dividend to 20 Australian cents (18.6 U.S. cents) per share fully franked.

Santos chief executive officer, David Knox, said in a statement: "The first half of 2014 saw Santos achieve its highest oil production in six years, record sales revenue and strong operating cash flow."

"PNG LNG is producing at full capacity, and GLNG is more than 85 percent complete and on track to start-up next year, within budget."

Santos has a 30 percent stake in the 18.5 billion Australian dollar (17.2 billion U.S. dollars) GLNG project at Gladstone in Queensland.