The rise in oil and LNG prices helped Woodside and Santos improve revenues for first quarters to the end of March.
Santos did best of the two, lifting its first-quarter revenue by 9.2% to $US964 million ($A1.24 billion) and it expects the higher LNG prices to continue.
Global oil prices were up around 20% to 22% in the first quarter and have risen since the end of March to be up around 25% from the start of the year.
Santos told the ASX in its first-quarter report on Thursday that production was up 39% on a year ago at 24.8 million barrels of oil equivalent, mostly due to the company’s acquisition of ConocoPhillips’ northern Australia and Timor-Leste assets in May of last year.
However, Santos said production was eased 2% from the December quarter primarily due to lower domestic gas demand in Western Australia, and unplanned maintenance in Papua New Guinea, offset by strong production from its Bayu-Undan offshore Darwin.
Santos CEO Kevin Gallagher said in the report that the company had delivered another strong quarter of production and sales volumes, and strong free cash flow, as the business benefited from higher commodity prices and a low free cash flow breakeven oil price.
This was despite the 3-month lag in oil-linked LNG prices, which it said should see stronger prices in the second quarter.
“Our consistent and successful strategy combined with the disciplined, low-cost operating model continue to drive strong performance across our diversified portfolio,” Mr Gallagher said.
“Free cash flow generation of US$302 million in the first quarter demonstrates our diversification and leverage to oil price.
“We are currently forecasting more than US$1 billion in free cash flow for the year at current oil prices.”
Santos said net debt at the end of the first quarter (including leases) was $US3.6 billion after payment of the $US104 million 2020 final dividend.
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Meanwhile, Woodside Petroleum lifted first quarter revenue 4.2% to $US1.12 billion ($A1.44 billion) in the three months to March.
It was also a 22% lift on revenue for the December quarter – as those higher oil and natural gas prices lift energy markets from the lows of the pandemic.
Woodside said sales volumes in the three months to March 31 rose 8% to 25.7 million barrels of oil equivalent (MMboe) from the first quarter of 2020.
Delivered production of 23.7 MMboe down 2%.
Acting CEO Meg O’Neill said in her statement that production at its oil assets had been impacted by heavy weather in the quarter, though this was offset by an increase in our average realised price to a level comparable to the same time a year ago.
“Woodside achieved record spot LNG prices and its highest price premium for an oil cargo during the period,” Ms O’Neill said.
“More importantly, the sustained increase in oil and gas prices reflects the rebound in demand as economic conditions improved across Asia.
“The swift rebalancing of markets after the disruptions of 2020 further underpins our positive outlook for LNG in the medium term.”
Woodside shares dipped 0.8% to $22.80 while Santos shares lost 0.1% to $6.93.
