Santos Ltd STO.AX, Australia’s no.2 independent gas producer, on Tuesday flagged that its gas and oil output is set to fall by around 10% in 2023, a bigger decline than analysts had expected, which sent its shares down 3%.

The production decline reflects the end of life at the Bayu Undan gas field off northwestern Australia and weaker gas production in Western Australia, Santos said in slides released ahead of an investor briefing.

Production in 2023 is expected to drop to between 91 million and 98 million barrels of oil equivalent (mmboe), down from between 103 mmboe and 106 mmboe this year, the company said.

Analysts’ consensus for 2023 production was at 99 mmboe, according to Barrenjoey.

The output forecast does not include the company’s announced sale of a 5% stake in PNG LNG, which has yet to be completed.

Santos shares fell as much 3.3% after the investor briefing was released in a firmer broader market .AXJO.
Source: Reuters (Reporting by Sonali Paul; Editing by Stephen Coates)