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Reuters Staff -Santos to book $690 mln charge on weaker oil price outlook



By Reuters Staff

Petroleumworld 08 16 2017

Australian oil and gas producer Santos Ltd said it expects to book a net impairment charge of about $690 million after tax in its half-year results, mostly on its Gladstone LNG project after slashing its oil price outlook.

Santos said it would write down the value of the GLNG project by about $870 million after tax, adding to a $1.1 billion writedown last year on the $18.5 billion project.

The project has struggled as supply from its coal seam gas fields has been weaker than expected.

Santos lowered its Brent oil price forecast to $50 a barrel in 2017 and $55 in 2018, which it said would weigh on the value of GLNG, its Indonesian assets and its Cooper Basin business.

The writedown would be partly offset by a $330 million gain in the value of its Cooper Basin gas assets, due to cost cuts, increased drilling activity and output, Santos said.

Santos' shares fell 1.9 percent in early trading after the announcement, underperforming a 0.3 percent fall in the energy index.

Santos is due to report its half-year results on August 24.

Reporting by Christina Martin in Bengaluru; Editing by Sonali Paul and Richard Pullin from Reuters.

08 15 2017

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