(Adds Gladstone LNG figures, outlook, CEO quote)
SYDNEY, Jan 20 (Reuters) - Santos Ltd STO.AX , Australia's second-largest independent gas and oil producer, reported a 26 percent rise in revenue for the fourth quarter of 2016, thanks to higher production and prices, and said it expects output to grow further in 2017.
Fourth-quarter revenue rose to $753 million from the same period a year earlier, with production up 1 percent to 15.0 million barrels of oil equivalent (mmboe), Santos said.
Annual sales rose 6 percent to $2.59 billion, just beating analysts' forecasts of $2.56 billion, according to Thomson Reuters I/B/E/S.
The company stuck to a previous forecast of producing between 55 million and 60 million barrels of oil equivalent in 2017, boosted by the ramp-up of its Gladstone liquefied natural gas (LNG) project, which started exporting more than a year ago but has yet to reach full capacity of 7.8 million tonnes a year.
In the year to Dec. 31, the Gladstone project produced 4.6 million tonnes, pushing total LNG sales volume up 89 percent for the year.
"Our business turnaround will continue as we reshape and focus our organisation to support five core, long-life natural gas assets: Cooper Basin, GLNG, PNG, Northern Australia and WA Gas," Santos Chief Executive Officer Kevin Gallagher said.
"This singular focus will allow Santos to become a leaner, lower cost and high performing business with significant upside opportunities across our portfolio," he added in a statement.
Santos, which counts China's ENN Group as its largest shareholder, launched a surprise A$1.5 billion ($1.1 billion) share sale in December to help speed up its debt cutting effort, soon after outlining plans to focus on five long-life gas projects in Australia and Papua New Guinea. shares last traded at A$4.11, up slightly from the A$4.06 issue price in the share sale. ($1 = 1.3231 Australian dollars) (Editing by Matthew Lewis)