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Santos releases 1Q17 activities report

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LNG Industry,

Santos has released its activities report for 1Q17.

In the report, Santos claims that 2017 forecast free cash flow breakeven has been reduced to US$34/bbl. This is compared to US$36/bbl in 2016.

Furthermore, the company reported that net debt was reduced to US$3.1 billion at the end of 1Q17. This is compared to US$3.5 billion at the end of 2016. Santos also reported the early repayment of US$250 million in 2019 Export Credit Agency (ECA) debt, as well as US$860 million of undrawn bilateral bank loan facilities due to mature in 2018 extended to 2022.

Discussing the Gladstone LNG (GLNG) project, Santos claims that the facility’s production increased to 1.4 million t in 1Q17, as continued strong production from Fairview and improved Roma field performance boosted equity gas supply.

In the report, the company also claims that the Muruk gas discovery appraisal is still continuing, and that the Barossa appraisal is underway.

Kevin Gallagher, the Managing Director and CEO of Santos, said: “Our costs have again been reduced, we have improved our free cash flow position and our net debt has been lowered.

“Our 2017 forecast free cash flow breakeven now stands at US$34 per barrel. This is a significant reduction from the $47 per barrel mark at the beginning of 2016.

“Strong free cash flow combined with cash proceeds from asset sales and the Share Purchase Plan enabled us to reduce net debt by US$380 million in the first quarter. This is strong progress towards our target of a US$1.5 billion reduction in net debt by the end of 2019. We will continue to prioritise free cash flow for debt reduction.

“GLNG produced higher LNG volumes in the first quarter, as strong upstream field performance delivered higher volumes of equity gas to the LNG plant.”

Total 1Q17 production of 14.8 million Boe was down slightly from the previous quarter, largely due to the sale of the Victorian, Mereenie and Stag assets, partially offset by higher GLNG equity production. Total sales volumes of 18.6 million Boe were lower due to asset sales, lower third party volumes and the timing of liftings.

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