Santos today announced an impairment to the value of its NSW gas assets.

As has been seen across the oil and gas industry, the significant reduction in global oil prices has had an impact on Santos’ financial performance and as a result we have impaired a series of assets across the company.  This includes the company’s assets in NSW.

The effect of this impairment is to write down the remaining book value of the NSW assets.

The adjustment to our balance sheet reflects today’s low oil price environment and the fact that the rate of investment in the Narrabri Gas Project will be slowed.

Consistent with this accounting treatment and the slower investment rate, using the Society of Petroleum Engineer’s reserve and resource definitions, Santos is reclassifying the current NSW reserve bookings as Contingent Resources.

These changes do not alter the strategic importance Santos attaches to the Gunnedah Basin and the potential of the Narrabri Gas Project to produce much-needed natural gas for NSW.

Santos is continuing to progress the approval processes for the Narrabri Gas Project.

The gas reserve bookings will convert back from the Contingent Resource category to the Reserves category when a development decision is imminent.

Santos is working towards this goal.