Santos Ltd., Australia’s third-biggest oil and gas producer, reported a first-half net loss of $1.1 billion after taking a $1.05 billion charge on its Gladstone liquefied natural gas export project in Queensland.
The loss compared with net income of $30 million a year earlier, the Adelaide-based company said in a statement Friday. It recorded an underlying loss of $5 million, versus a profit of $25 million in the previous corresponding period. It has switched to reporting in U.S. dollars from Australian dollars.
Santos booked the impairment charge on Gladstone amid rising prices for third-party supplies and a slower-than-expected ramp up of its own output to feed the project. The company is also grappling with declining prices, with its realized oil price falling 29 percent to $42.79 a barrel, while the average LNG price was 42 percent lower.
Shares in Santos, which derives more than half of its revenue from LNG, have risen 37 percent this year. The company rose as much as 2.4 percent in Sydney before trading 0.6 percent higher at A$4.98 as of 10:51 a.m. local time. The benchmark S&P/ASX 200 Index climbed 0.3 percent.