Australia's Santos H1 profit inches up, beats forecasts

MELBOURNE Thu Aug 21, 2014 7:11pm EDT

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MELBOURNE Aug 22 (Reuters) - Australian oil and gas producer Santos Ltd beat forecasts with a 3 percent rise in first-half core profit and said its $18.5 billion Gladstone liquefied natural gas project was on track to start producing in 2015.

However Santos gave no update on capital management plans, which could disappoint some investors who were hoping for a share buyback or special dividend as a sign of confidence in the company's outlook.

Underlying profit rose to A$258 million for the six months to June from A$251 million a year earlier. That beat an average forecast of A$222 million from four analysts.

"We have set the foundation for a stronger second half," Santos CEO David Knox said in a statement.

Net profit fell 24 percent to A$206 million, hit by writedowns of A$70 million mostly related to its Indonesian coal seam methane business. The writedowns had been flagged to investors.

Santos shares have slipped 0.3 percent this year, underperforming a 5.4 percent rise in the broader market .

(Reporting by Sonali Paul; Editing by Edwina Gibbs)

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