Gas Week

EWN Publishing

Santos forecasts 14K barrels/day oil from Cooper Basin by end 2007: profitable as long as oil-price stays high

Posted by gasweek on 20 September, 2007

Santos remained confident the program to drill for the oil deposits left behind when gas was the target in the Cooper Basin would be delivering 14,000 barrels a day by the end of 2007, reported The Australian Financial Review (24/8/2007, p.65).

Depends on oil price: If that was sustained for the whole of 2008, Cooper Oil would deliver an extra 5 million barrels of production, worth more than $400 million at Santos’s average realised oil price of $83.27 for the first six months of this year. This sounded great until you factored in the $388 million Santos was spending on Cooper oil in 2007 on top of $277 million it spent last year. Santos managing director John Ellice-Flint was certain the oil program would deliver good returns, as long as oil prices stayed high.

Bottom-line not immediate: But he was also talking up plans to increase Santos’s exposure to liquefied natural gas and other higher margin production once the short-term production boost from Cooper Oil tailed off. The problem with most of those projects – including the $7 billion Gladstone LNG plant Santos announced last month that it wanted to build – is that they would take a while to deliver results to the bottom line.

The Australian Financial Review, 24/8/2007, p. 65

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