News: UPDATE 1-Santos Q3 revenue jumps on rallying oil prices, raises output forecast

(Adds production forecast, details on debt)

Oct 19 (Reuters) - Australia's Santos Ltd (STO) on Thursday reported a 22 percent rise in revenue during the third quarter, underpinned by a rise in prices of oil and liquefied natural gas (LNG), with Brent hitting its highest in more than two years last month.

Revenue rose to $793 million in the quarter from $650 million a year earlier, and beat a forecast of $742 million from UBS.

Santos also upgraded its production forecast range for 2017 to 58-60 mmboe from an earlier guidance of 57-60 mmboe, it said in a statement.

Drilling activity was increased in both the Cooper Basin and Gladstone liquefied natural gas (GLNG) with 16 Cooper and 53 GLNG wells drilled in the quarter, Chief Executive Kevin Gallagher said.

However third-quarter production fell 3 percent to 15 million barrels of oil equivalent (mmboe) from a year earlier, due to maintenance work at GLNG.

Rapid growth in LNG exports from eastern Australia has strained local gas supply and driven up prices, hurting industry and households, and led the government to pressure GLNG and two other plants on the east coast to sell more gas at home.

In September, the three east coast LNG exporters agreed to a two-year domestic supply deal to plug the projected shortfall in the country's east.

At the bottom line, Santos cut its net debt to $2.8 billion at the end of the quarter, down from $3.5 billion at the end of 2016.