Australia's third biggest oil and gas producer, Santos survived a slight drop in annual output and an easing world oil price to post a modest 23c gain to close at $12.31 yesterday.
The company said in its fourth quarter production report that annual output was in line with guidance and just under last year's record level.
Production was 59.1 million barrels of oil equivalent (mmboe) in 2007, down just 3% from 61mmboe in 2006.
Annual revenue was $2.489 billion, down 10%, despite higher prices.
The major factor was the strength of the Australian dollar, especially in the third and fourth quarters.
The market excused the company this small miss, unlike Newcrest and Kagara, which were punished for surprises on the downside.
Santo said its annual figures were in line with previous guidance and had been positively impacted by the start-up of Oyong oil production.
However, planned maintenance shutdowns at the Bayu-Undan and Moomba processing facilities, as well as lower oil production from the Mutineer-Exeter fields, were negatives.
In the December quarter, output fell 6% to 14mmboe from the September quarter and was down 9% on the December quarter in 2006.
Quarterly revenue was $647 million, up 3% on the September quarter but down by the same amount on the same quarter in 2006.
Santo said it realised a higher oil price in the year of $A92.10, although this was impacted by a stronger Australian dollar.
"The Q4 2007 realised oil price of A$110.76 was a record, and 25% above the previous corresponding period in 2006. The full year 2007 oil price of A$92.10 was 3% above 2006 levels. In US$ terms, the oil price increased by 19%," Santos said in its statement to the ASX.
"The 2007 average portfolio gas price of $3.95 was 6% higher than 2006," it added.
"2007 was a year of significant achievement for Santos, with the removal of the 15 per cent shareholder cap, the announcement of the Gladstone LNG project, positive progress on the PNG LNG project, and first oil from the Oyong development," managing director John Ellice-Flint said.
"At the same, we have sanctioned our next wave of developments, including the Kipper Gas project in the Gippsland Basin, the Henry Gas project in the Otway basin and phase 2 of the Oyong field development in Indonesia.
"It was pleasing to see increased production from the Cooper Oil Project during the fourth quarter, with the resolution of a number of the system issues which were impacting on our ability to transport oil from the fields."
Mr Ellice-Flint said in 2008 Santos would continue to invest in its growth.
"Santos is well positioned with large contingent resources and is well placed to leverage the growing regional demand for cleaner fuels," he said.
"The year ahead will be defined by progress across our LNG portfolio, in particular the Gladstone LNG and PNG LNG projects."
The company said key activities during the December quarter included:
• Kipper gas development project (Gippsland Basin) sanctioned, with first gas expected in H1 2011.
• Henry gas development project (Otway Basin) sanctioned, with first gas expected in H1 2009.
• Phase 2 of the Oyong field development (Indonesia) sanctioned, with first gas expected in H1 2009.
• Reindeer gas field development (Carnarvon Basin) FEED completed, with project sanction anticipated during H1 2008.
• New country entry into Bangladesh, with a subsequent gas discovery at the Magnama prospect.
• Legislation removing the 15% shareholder cap was passed. Cap removal will be effective from 29 November 2008.
