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SANTOS Limited (ASX: STO) has reported a loss of $640 million for the first six months of 2017, a huge reduction on last year's $1.4 billion recorded loss, with the results including an $872 million impairment charge on account of lower oil price forecasts.
The Adelaide-based company posted improved results from the previous comparable period, on the back of a turnaround in strategy for the oil company, according to Santos cEO Kevin Gallagher.
"We have removed substantial costs, generated significant free cash flow and reduced net debt," says Gallagher.
The company generated earnings of $908 million and revenue of $1.9 billion for the first half of 2017, with revenue being driven by higher LNG sales volumes.
"Our focus on more efficient, lower cost operations has delivered significant improvements in earnings and cash flow," says Gallagher.
"Santos' core asset portfolio of five long-life natural gas assets now provides stable base production for the next decade."
The company recorded an underlying profit of $197 million, a substantial improvement on the underlying loss of $6 million this time last year.
Operating costs were on the rise for the South Australian oil company which increased by $239 million due to higher LNG plant costs, higher pipeline capacity charges, and higher royalty and excise costs due to higher average commodity prices.
The company expects sales volume for the remainder of 2017 to hit between 77 to 82 million barrels of oil.
The Santos board has decided to not pay an interim dividend following the first half results.
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