Santos Third-Quarter Sales Rise 16% on Oil Price Gain

By Angela Macdonald-Smith

Oct. 23 (Bloomberg) -- Santos Ltd., Australia's third- biggest oil and gas producer, said third-quarter sales rose 16 percent as increased prices outweighed lost output caused by a gas plant blast.

Sales advanced to A$730 million ($485 million) in the three months ended Sept. 30, from A$627 million a year earlier, Adelaide-based Santos said today in a statement to the Australian stock exchange. Output dropped 12 percent to 13.2 million barrels of oil equivalent and Santos maintained a reduced full-year forecast at 54 million to 56 million barrels.

Santos's production was cut in the quarter by reduced output from the John Brookes field after an explosion at Apache Corp.'s Varanus Island gas plant off Australia's northwest coast in June. The company received $2 billion in the quarter from Malaysia's Petroliam Nasional Bhd. for a stake in a coal-seam gas-liquefied natural gas venture.

``The outlook for Santos remains positive despite the global financial crisis,'' Chief Executive Officer David Knox said in the statement. ``All our development projects remain on schedule, and we remain focused on delivering our strategy.''

The average price the company got for its oil in the quarter was 59 percent higher than in the year-earlier period, while the average gas price rose 25 percent.

Santos dropped as much as 91 cents, or 7.8 percent, to A$10.81 in Sydney trading on the exchange and was at A$11.00 at 10:50 a.m. local time. The decline compared with a loss of as much as 4.3 percent in the exchange's benchmark energy index after crude-oil prices fell yesterday in New York.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net