Santos has lowered outlook for 2010 as profit in 2009 falls 74%

SantosSantos Ltd, the oil and gas producing company, has lowered its 2010 guidance after reporting a decrease of 74% in its annual net profit in FY 2009. Santos posted a net profit of A$434 million in FY 2009 while in the previous fiscal of 2008 the company posted net profit of A$1.7 billion.

The Adelaide based company also said that the net profit in FY 2008 was hugely attributable to the sale of 40% stake in Santos's Queensland liquefied natural gas venture.

In fiscal 2008 the net sales were reported A$2.18 billion decreasing by 21%. Sales were lower because of the lower product prices in 2009. The underlying net profit for FY 2009 was posted A$257 million while it was posted A$548 million in FY 2008.

However, Santos has provided its 2010 production guidance and the company said that it expects the output for 2010 between 51 million and 54 million barrels.

Santos also revealed its plans for a liquefied natural gas venture in the state of Queensland. The company has the plans to produce 20 million tons of LNG per year with five processing units in the venture. The first unit of the project is expected to produce 3.6 million tons of LNG a year.

Santos will make a final decision on the first phase by mid 2010. Santos said that to fund its LNG project, the company may sell its assets further this year.