Santos says Alaska oil project could start early while first-quarter revenue dips
Australian oil and gas producer Santos said on Thursday it could potentially bring forward the startup for its Pikka phase 1 in Alaska, while posting a 7% fall in first-quarter sales revenue due to lower crude sales volumes and realised prices for its LNG products.
Shares of the firm rose as much as 2.7% to A$5.640 by 01:06 GMT, matching a 2.7% jump in the broader energy sub-index.
Analysts at Citi attributed the positive market reaction to the potential early output from Pikka, one of the largest oil prospects in Alaska. The project's first production is scheduled for mid-2026.
But Santos said a 120-mile pipeline was now substantially complete, creating "the opportunity for an early startup, subject to weather and logistics, which will become clearer in the second quarter".
The Pikka project is set to be a key asset for Santos as US President Donald Trump charts plans to boost domestic energy production.
Global LNG prices have tumbled since China's first 15% retaliatory levy shut off US imports in February, triggering a cascade of cargo re-routing.
The average realised price for Santos' liquefied natural gas plunged to $11.57 per million British thermal units (mmBtu), down from last year's $12.68 per mmBtu.
Sales volumes of crude oil for the quarter came in at 1.3 million barrels, down from 1.5 million barrels a year ago.
The company attributed the dip in sales volumes to no crude oil being lifted in the quarter from its Pyrenees project off Western Australia, which is operated by co-owner Woodside Energy, along with lower third-party purchases.
The country's second-largest independent gas producer said sales revenue for the three months ended March 31 came in at $1.29-billion, missing a Visible Alpha consensus estimate of $1.32-billion. It reported $1.40-billion in sales revenue a year ago.
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