Santos Ltd. (ASX:STO) announced that it will reduce its 2015 capex by some 25 percent, from the planned $2.7 billion to $2 billion.
Santos Ltd. (ASX:STO) announced that it will reduce its 2015 capex by some 25 percent, from the planned $2.7 billion to $2 billion. The company said that the capex cutback is a practical reflection of the current environment and that its financial position remains strong.
As quoted in the press release:
Growth and sustaining capital expenditure in 2015 are now forecast at $1.4 billion and $600 million respectively, as outlined on the attached slide. Asset divestments remain under consideration as part of the company’s ongoing portfolio management provided fair long term value is realised.
This is a prudent reflection of the revised environment and does not prejudice the company’s longer term growth options. 2015 production guidance is maintained at 57 to 64 million barrels of oil equivalent.
Santos Managing Director & Chief Executive Officer David Knox stated:
We remain on track to realise the cash flow benefits in 2015 and 2016 from our growth investments in recent years
The PNG LNG project is producing at full capacity. The GLNG project is 90% complete and remains on track for first LNG in the second half of 2015. First commissioning gas is expected to be introduced to the LNG plant before the end of 2014. Offtake agreements are in place with large, well-capitalised buyers.