Energy giant Santos looks to have turned a corner, as spending and cost cuts offset weak oil prices to deliver a quarterly revenue increase.
Sales revenue rose one per cent to $835 million in the three months to March, as production increased by 11 per cent to 15.6 million barrels of oil or equivalent (mmboe).
Prices plunged 28 per cent to an average of $51.26 a barrel in the quarter, compared to a year earlier, but Santos slashed its capital expenditure in the period by 59 per cent and reduced production costs by 13 per cent.
Chief executive Kevin Gallagher said the company was focused on developing a business that is self-sustaining in a low oil price environment.
"The company's first quarter results reflect solid production and a commitment to drive costs down and improve efficiencies across the business," he said.
"We will continue to look for opportunities to lift productivity and reduce costs."
Santos said March quarter sales volumes were up 40 per cent on the corresponding quarter as the first train of Gladstone LNG shipped 16 cargoes in the quarter.
It reaffirmed its annual production guidance of 57 to 63 mmboe.
The company made a loss of $2.7 billion in 2015 due to a slump in oil prices, but prices have recently improved.
Fat Prophets analyst David Lennox said Santos' quarterly result was in line with the company's aims after restructuring late last year.
"I can't fault it," Mr Lennox said.
"They've done a lot of good work to turn it around.
"Production's up, sales are up but if the oil price had increased 28 per cent instead, this company would have been swimming along."
Mr Lennox expects the company to produce some reasonably good numbers over the next 12 months.
CMC Markets analyst Ric Spooner said Santos would begin reaping further benefits when GLNG's second train came online.
Shares in the company dropped one cent to $4.62.
