Santos Beats Sales Estimates, Reviews Writedowns on Oil Drop

Santos Ltd., Australia’s third-largest oil and gas producer, beat estimates by reporting a 2 percent gain in fourth-quarter sales after the start last year of its liquefied natural gas export project in Papua New Guinea.

Sales rose to A$1.09 billion ($870 million) from A$1.07 billion a year earlier, the Adelaide-based company said today in a statement. That exceeded the A$974 million median estimate of three analysts surveyed by Bloomberg News. The shares rose as much as 6.2 percent in Sydney, the most in a month.

The gains come as the crash in crude prices last year puts pressure on Santos before the scheduled start up later this year of its $18.5 billion gas export project in Queensland state. The company is reviewing the potential for writedowns because of the oil downturn, according to the statement.

Santos, whose total debt at the end of the first half of 2014 climbed 31 percent from the year before as the company built the Gladstone LNG project in Australia, slashed its spending plans last month and flagged asset sales.

Brent crude, a benchmark for more than half of the world’s oil, declined 39 percent in the last three months of 2014 as increasing output in the U.S. contributed to a global glut.

Production in the quarter rose 15 percent to 15.1 million barrels of oil equivalent, compared with the 14.9 million barrel median estimate, the company said today.

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