Australian energy company Santos has cut its capital expenditure for 2015 by 25%.
The company said there will be a drop in spending from $2.7billion to $2billion.
However managing director, David Knox, has insisted the company’s financial position remains strong.
Mr Knox said: “We remain on track to realise the cash flow benefits in 2015 and 2016 from our growth investments in recent years.
“The PNG LNG project is producing at full capacity. The GLNG project is 90% complete and remains on track for first LNG in the second half of 2015.
“First commissioning gas is expected to be introduced to the LNG plant before the end of 2014.
“Offtake agreements are in place with large, well-capitalised buyers.”
“To be clear, the underlying performance of our business remains strong with production continuing to grow in the second half of this year.
“The company has no present need or intention to raise equity.
“The current volatile oil price means that Santos is focused on driving operational efficiency, reducing costs, prudently managing capital and making sure our balance sheet remains strong – without making short term reactive decisions that could damage the long term interests of the company or the interests of shareholders.
“We remain committed to restoring value for our shareholders.”
Growth and sustaining capital expenditure in 2015 are now forecast at $1.4 billion and $600 million
Santos said asset divestments remain under consideration as part of the company’s ongoing portfolio management provided fair long term value is realised.
Earlier this week, ConocoPhillips said it would be cutting its spending by 20%.
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