By Stuart Condie

SYDNEY--Woodside Petroleum Ltd. said third-quarter sales revenue fell 42% from a year earlier as lower realized liquid natural gas prices more than offset a rise in production.

The Australia-listed company said Thursday it produced 25.3 million barrels of oil equivalent in the three months through September, down 2.3% from the second quarter, but up 1.6% on the same period a year earlier. Sales revenue fell to US$699 million from US$768 million in the second quarter, and from US$1.21 billion in 3Q of FY 2019.

Chief Executive Peter Coleman said lower LNG prices reflected a price lag in many of its contracts. He said Woodside anticipated higher prices in the next two quarters amid higher oil prices.

Woodside said it cut the number of direct employees by 8% over the third quarter, and continued to pursue cost-cutting opportunities.

Write to Stuart Condie at stuart.condie@wsj.com

Corrections & Amplifications

This item was corrected at 6:59 p.m. ET. An earlier version misstated Woodside Petroleum Ltd. as Santos.

(END) Dow Jones Newswires

10-21-20 1834ET