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Santos recognises impairment of assets

LNG Industry,

Santos, operator of the Gladstone LNG (GLNG) project in Queensland, Australia, expects to recognise a non-cash impairment charge of approximately AUS$1.6 billion after tax in its 2014 results.

The impairment charge reflects the lower oil price environment. Impairment outcomes are subject to finalisation of the full-year results, which will be released on 20 February.

In carrying out the impairment analysis, Santos has used future oil price estimates, which assume short-term market prices for four years, reverting to a long-term price of US$90 real from 2019. The future AUS$/US$ exchange rate is assumed to be 0.80 in all years.

There is no impairment of GLNG, which is on track for first LNG in the second half of 2015, within budget.

The non-cash impairment charges are not expected to impact Santos’ investment grade credit rating or debt facilities.

Adapted from press release by Katie Woodward

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