Australian energy company Santos posts heavy losses

ADELAIDE, Australia, Aug. 21 (UPI) -- After reporting heavy losses in a weakened energy sector, Australian company Santos said Friday it was time to "institute a succession of leadership."

Santos released net profit for the first half of 2015 at $37 million, 82 percent lower year-on-year. Capital expenditure was down by more than half from the same period in 2014, reflecting the substantial slump in crude oil prices.

Santos last month said it was maintaining its production guidance moving forward despite reductions in capital and operating expenditure. During the second quarter, the company produced 14.3 million barrels of oil equivalent, 12 percent higher year-on-year, and posted sales volumes of 15.7 million boe, 4 percent higher year-on-year. Sales revenue, however, fell 19 percent.

The board of directors said Chief Executive Officer David Knox will step down after seven years on the job. Chairman Peter Coates will serve as the interim director until a successor is named.

"The board and David have agreed that it is an appropriate time to institute a succession of leadership," Coates said in a statement.

Knox said in a statement the company was taking the "appropriate steps" to cut operating costs. For full year 2015, Santos is targeting $180 million on supply chain savings.

"Tightly managing costs will continue to be a key focus as we work through the current oil price environment," he said in a statement.

Santos reported what it characterized as strong operational performance from its liquefied natural gas portfolio, particularly from its LNG project in Papua New Guinea. The Asian Development Bank said natural gas exports from Papua New Guinea are helping to boost short-term overall growth for Pacific economies. The bank estimated Pacific economies will grow by an average rate of 9.9 percent this year, trumping the impact of recent natural disasters.

Overall production from Santos for the first half increased 13 percent from the same period last year, but overall revenue dropped 15 percent because of lower prices.