Australian energy company Santos said it was maintaining its production guidance moving forward despite reductions in capital and operating expenditure.

"Santos is taking positive steps to strengthen the company's operating position in the lower oil price environment," Managing Director and Chief Executive Officer David Knox said in a statement. "Year to date capital expenditure is 53 percent below 2014 levels and our production costs for the first half are tracking below guidance."

During the second quarter, Santos said it produced 14.3 million barrels of oil equivalent, 12 percent higher year-on-year, and posted sales volumes of 15.7 million boe, 4 percent higher year-on-year. Sales revenue, however, fell 19 percent because of higher gas prices at home and a weaker Australian dollar.

Knox added that the $18.5 billion liquefied natural gas venture in Queensland was still expected achieve first production during the third quarter, in line with expectations from earlier this year. Capital expenses are expected to decline substantially in the second half of the year, in line with peer companies operating in a weak energy market.

Exploration and evaluation costs rose, which the company attributed to offshore activity in Malaysia and

Papua New Guinea. An LNG project in Papua New Guinea was among the standouts in terms of production, meanwhile, with year-on-year output more than doubling.

The Asian Development Bank said Wednesday natural gas exports from Papua New Guinea are helping to boost short-term overall growth for Pacific economies. The bank estimated Pacific economies will grow by an average rate of 9.9 percent this year, trumping the impact of recent natural disasters.