Showing quarterly pressures, but year-on-year improvements, Australian energy company Santos said its strategy is supporting forward momentum.

Production for Santos declined 1 percent from the first quarter, showed an 8 percent increase from second quarter 2015 and, year-to-date, was up 10 percent from last year to 31.1 million barrels of oil equivalent.

The company last year reported heavy losses in net profits and capital expenditures, reflecting the substantial slump in crude oil prices. Oil prices have been relatively stable, hovering around $45 per barrel for several weeks. The price, however, is more than 60 percent below peak levels from 2014.

Santos leads an $18.5 billion project designed to convert coal seam natural gas to liquefied natural gas for exports to the global market. The Curtis Island LNG project is fed by a 260-mile underground pipeline from the Bowen and Surat basins in Queensland.

While capital spending continued to trend lower, the company in the second quarter sold more in terms of volume than it did last year by 25 percent.

"There is a lot of work ahead of us but today's results show we are heading in the right direction," CEO Kevin Gallagher said in a statement.

The company said it was keeping its production guidance in place for the year at between 57 million and 63 million barrels of oil equivalent. Sales revenue was down 3 percent year-on-year and 2 percent from the first quarter to $590 million.

Chinese gas distributor ENN Group introduced a proposal in March to take in 11.7 percent in the shares in Santos held by Hony Capital. ENN is the largest gas distributor in China.

Struggling through a weakened energy market, the company last year said it was taking the "appropriate steps" to cut costs, saying it planned to explore interests expressed in its various assets across Australia.