Santos Quarterly Sales Slide 24% as Producers Face Price Slump

Santos Ltd., the Australian oil and gas producer that rejected a $5.15 billion takeover offer this week, reported a 24 percent decline in third-quarter sales due to a tumble in energy prices.

Revenue fell to A$808 million ($583 million) from A$1.06 billion a year ago, Adelaide-based Santos said Friday in a statement. Forecast capital expenditure for 2015 has been trimmed a further 10 percent to A$1.8 billion, the company said.

Santos, which spurned the takeover attempt by Scepter Partners as too low and “opportunistic,” is among companies grappling with a slump in energy prices amid a surge in supply. Drillers globally have reduced investments in exploration and production by a record 20 percent this year, according to the International Energy Agency, as oil averaged 50 percent less in the quarter compared with a year ago.

Scepter lined up the former head of Santos, John Ellice-Flint, to run the company if its takeover succeeds. Santos became seen as a takeover target in August after it began a strategic review and Chief Executive Officer David Knox said he would step down. The company’s main assets include a 13.5 percent stake in Exxon Mobil Corp.’s $19 billion liquefied natural gas venture in Papua New Guinea and the $18.5 billion Gladstone LNG project in Australia.

Santos is continuing with a strategic review and will consider all proposals that deliver appropriate value and certainty for shareholders, the company said Friday.