Australia's Santos retained its annual production and sales forecasts despite a temporary outage at a gas facility and weather-linked disruptions impacting its first-quarter output, helping its shares outperform the broader market on Thursday.
Shares of the country's number two oil and gas producer ended 3.6 per cent higher at AU$7.71, their highest level in more than a week, while the broader ASX200 benchmark index fell 0.6 per cent to its lowest close since April 7.
Santos shares were propped up by "supportive oil price moves," said Saul Kavonic, head of energy research at advisory firm MST Marquee.
Oil prices extended their gains after settling above $100 a barrel for the first time the previous day amid stalled peace talks between Iran and the US and continued restricted movement through the Strait of Hormuz.
Adelaide-based Santos reported first-quarter sales revenue of $1.27 billion, lower than the Visible Alpha consensus estimate of $1.28 billion and the previous corresponding period's $1.29 billion.
Production rose 2.7 per cent to 22.5 million barrels of oil equivalent (mmboe) in the three months to March 31, but fell short of the street consensus of 23.3 mmboe, hurt by a temporary outage at the offshore Barossa gas project.
Late last month, Santos temporarily shut its Darwin LNG facility in the Northern Territory due to maintenance work on its floating production vessel at the offshore Barossa gas and condensate project, which feeds the Darwin plant.
Inclement weather conditions due to Tropical Cyclone Narelle disrupted port operations on the west coast, including the Port of Varanus Island, further weighing on the company's sales.
Despite the outage and the delays, Santos retained its full-year production and sales volume forecast between 101 and 111 mmboe.
"The market is looking through the revenue miss towards guidance that the start-ups of Barossa and Pikka growth projects are around the corner after some delays," Kavonic said.
Santos said the Barossa facility is expected to begin ramping up production within the next week, while the Pikka Phase 1 is slated to achieve first oil in the coming weeks, with initial sales revenue expected about two months later.
The company also said its portfolio of high-quality liquefied natural gas (LNG) assets and proximity to Asian markets meant it was well positioned to meet "strong and growing LNG demand across this region".
During the quarter, it also worked with Viva Energy to bring forward part of a Cooper Basin crude parcel and sold a parcel of Varanus Island crude to Ampol, "supporting domestic refining capacity," said MD and CEO Kevin Gallagher.
(Reporting by Shivangi Lahiri, Sameer Manekar and Nikita Maria Jino in Bengaluru; Editing by Pooja Desai and Subhranshu Sahu)
