In addition to this, the company claims production was 7% higher than 2Q19, with higher production from all Australian assets. Record sales volumes of 25.2 million boe were also 25% higher than the corresponding quarter, and sales revenue of $1030 million was the second highest quarterly revenue on record.
Dorado appraisal success
- According to the report, well tests confirmed that the field is capable of producing flow rates at the higher end of pre-drill expectations.
- The oil test rate of 11 100 bbl/d (facilities constrained) was reportedly one of the higher ever from a North West Shelf appraisal well test.
- Santos claims that the well test results are supportive of FEED-entry early next year.
Strong free cash flow
- According to the report, Santos generated $214 million in free cash flow in 3Q19, brining total free cash flow for the nine months to $852 million.
Acquisition of ConocoPhillips’ northern interests announced
- On 14 October 2019, Santos announced the acquisition of ConocoPhillips’ interests in Northern Australia for US$1.39 billion, plus a contingent $75 million on Barossa FID (acquisition subject to third-party consents and regulatory approvals).
- Value accretive acquisition of operating interests in long-life, low cost, natural gas assets and strategic LNG infrastructure consistent with the company’s core asset growth strategy.
- Fully-funded from existing cash resources and new committed debt.
Santos Managing Director and Chief Executive Officer, Kevin Gallagher, said: “Santos continues to generate strong free cash flows from the consistent application of our disciplined operating model.
“Another highlight of the quarter was the successful appraisal of the Dorado field which is one of the most exciting growth projects in our portfolio. Following the strong well test results, we are targeting FEED-entry in early 2020.
“The acquisition of ConocoPhillips’ northern Australia interests announced earlier this week delivers shareholders operatorship and control of long-life, low cost natural gas assets and strategic LNG infrastructure aligned to our brownfield growth strategy. Santos is keen to work with our joint venture partners to achieve alignment to support our Barossa development and to facilitate the future development of the vast discovered resources offshore and onshore Northern Territory.
“This value accretive acquisition will also further reduce our free cash flow breakeven oil price and strengthen our offshore operating and development expertise to drive growth across northern and Western Australia where we have a significant existing resource position.”
Read the article online at: https://www.lngindustry.com/liquefaction/18102019/santos-releases-activities-report-for-3q19/