* Capital spending cut in half in 2015 to A$1.66 bln
* S&P cuts credit rating to one notch above junk
* 2015 revenue of A$3.2 bln misses market forecasts (Adds S&P downgrade, 2016 production outlook)
MELBOURNE, Jan 22 (Reuters) - Australian oil and gas producer Santos Ltd STO.AX , whose shares are at 23-year lows, said on Friday it is looking for more ways to slash costs to help weather the slump in oil prices after cutting capital spending more than expected in 2015.
Last November, the oil and gas producer conducted a A$3 billion ($2.10 billion) share sale to pay down debt after rejecting a A$7.1 billion takeover offer, but it has since seen its share price sliced in half as oil prices have hit 12-year lows.
Standard & Poor's had expected the capital raising would shore up Santos, but after lowering its oil price forecasts the agency cut the company's rating on Friday to one notch above junk grade, 'BBB-/A-3'.
S&P said it expected Santos' performance would "remain subdued" in 2016.
Scrambling to preserve cash, Santos said it cut capital spending by 54 percent in 2015 to A$1.66 billion, beating its target of A$1.8 billion flagged in November, while it pared its production costs by 10 percent, as planned.
"We are continuing to focus on reducing our capital expenditure and will build upon the significant improvements that we have made to our operating efficiency," Executive Chairman Peter Coates said in the company's quarterly report.
Santos' shares jumped 10 percent after the report and a rebound in oil prices on Friday, but that only took the battered stock to a one-week high.
Santos increased production in 2015 by 7 percent to 57.7 million barrels of oil equivalent (mmboe), within its target range, following the start of exports from the Gladstone liquefied natural gas (GLNG) project.
Annual sales revenue slid 20 percent to A$3.2 billion, coming in slightly below analysts' forecasts at A$3.3 billion, according to Thomson Reuters I/B/E/S.
Santos said in November it expects to produce between 57 and 63 mmboe in 2016 and aimed to cut capital spending to A$1.2 billion. There was no reference to that guidance for 2016 in its quarterly report.
Its new chief executive, Kevin Gallagher, is set to take the reins in February. ($1 = 1.4288 Australian dollars)