By David Winning

SYDNEY--Santos Ltd. said its first-quarter oil and gas output fell by 2% compared to the prior quarter, largely due to lower gas demand in Western Australia state and unplanned maintenance in Papua New Guinea.

Santos reported oil and natural gas production of 24.8 million barrels of oil equivalent in the three months through March. Still, that output was 39% higher than a year earlier as it included contributions from the Northern Australia assets acquired from ConocoPhillips in May last year.

Santos said higher GLNG equity gas production from the Roma and Arcadia fields supported annualized LNG production of 6.4 million metric tons in the quarter.

First-quarter revenue of US$964 million was 5% higher than the prior quarter, despite the contractual three-month lag in oil-linked prices of liquefied natural gas and lower overall sales volumes, the Adelaide-based company said.

Chief Executive Kevin Gallagher said the rally by LNG prices earlier this year should lead to stronger prices in the second quarter as the lag effect fades.

Net debt totaled US$3.6 billion at the end of March, while Santos generated US$302 million in free cash flow in the first quarter.

"We are currently forecasting more than US$1 billion in free cash flow for the year at current oil prices," Mr. Gallagher said.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

04-21-21 1924ET