So far March quarter production reports from the likes of BHP Billiton and Rio Tinto have been less than positive. "Mixed" is a good way to describe them.
Possibly the best has been from OZ Minerals which continues to reveal positive news about its Prominent Hill mining operation in South Australia.
Rio and BHP both fell short on iron ore because of weather and operational constraints (which if continue into the next quarter, will really start to worry some investors).
Yesterday there was another mixed batch: Newcrest cut its gold forecast, Iluka was generally upbeat about beach sands minerals (see separate story), but Santos cut its 2010 oil production forecast, again because of bad weather.
Santos said it produced 12.4 mmboe (million barrels of oil equivalent) in the March quarter, down 11% on the December quarter, and 6% on a year earlier, blaming heavy rain and floods in Central Australia and Queensland.
Revenue in the March quarter 2010 was $511 million, down 15% from the three months to December and 5% on a year ago.
Gas production was steady with the prior corresponding quarter, following "strong" production from Santos’s John Brookes and Indonesian gas fields.
But the company’s oil production was lower, due mainly to flooding limiting access to wells, along with an unplanned shutdown at its Mutineer-Exeter operation.
Santos said the flooding in Central Australia would lead to the deferral of an estimated net two mmboe of production.
"Consequently, 2010 production guidance has been reduced by two mmboe to a range of 49 to 52 mmboe," Santos said.
"2010 Cooper Basin gas sales revenue is not expected to be materially impacted by the production deferral as customer deliveries are being met from a combination of current production and gas from storage."
Santos lowered its guidance on capital expenditure due primarily to flood impacts delaying Cooper Basin project activities and the timing of spending across the base business capital expenditure program.
Santos chief executive officer, David Knox, said in the statement that the heavy rain and flooding in Central Australia would impact Santos’s operations in the Cooper Basin for several months, but the continued delivery of gas to customers was a significant achievement in difficult conditions.
"We continue to monitor conditions in the Cooper Basin to ascertain how quickly full production and development activity can resume, but we are confident the actions we have taken in response to the conditions will minimise disruption," Mr Knox said in a statement to the Australian stock exchange.
He said Santos’s Gladstone liquefied natural gas (GLNG) project was making "significant progress" with FEED works nearing completion and detailed discussions proceeding with a number of LNG buyers for offtake from the project’s first two trains.
"These discussions include the potential for buyers to purchase an equity stake in the project," Mr Knox said.
The quarterly revenue of $511 million was the lowest for four years, as was production.
The shares fell 25c to $13.96.
