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Santos releases 4Q18 activities report

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Santos has released its fourth quarter activities report for 2018, reporting record quarterly sales revenue of AUS$1043 million, up 7% and including record quarterly LNG sales revenue of AUS$449 million, up 11%.

According to the statement, the company also reported record annual sales revenue of AUS$3696 – an increase of 19%. In addition to this, it reported fourth quarter production up 6% to 15.9 million boe due to sustained strong performance from the core portfolio and acquisition of Quadrant Energy, partially offset by the sale of the non-core Asian assets.

Other highlights include the following:

Onshore activity levels increasing within disciplined operating model

  • A record 305 wells in GLNG drilled last year, up 77%. The company is also expecting to drill 350 – 400 wells this year.
  • 85 wells drilled in the Cooper Basin last year, up 40%. The company is expecting to drill approximately 100 wells this year, including up to 16 exploration wells.

Cooper Basin exploration and appraisal success

  • In addition to this, Santos claims that the Cooper Basin exploration program lead to five new field discoveries (four gas and one oil) and at Moomba South, four appraisal wells targeting a significant 2C resource have been brought online.
  • Santos also claims that the Moomba South program discovered new plays in the Granite Wash and Tirrawarra sandstone, which are currently under assessment for further appraisal.

Quadrant Energy acquisition completed on 27 November 2018

  • On completion, Santos paid AUS$1.93 billion, comprising the purchase price of AUS$2.15 billion less completion adjustments and cash acquired.

Cash generative core portfolio. Balance sheet supportive of growth profile

  • As of 31 December last year, Santos claims that it had cash and cash equivalents of AUS$1.3 billion, as well as a total debt of AUS$4.9 billion. This resulted in net debt of AUS$3.6 billion and gearing of approximately 33%.

Kevin Gallagher, the Managing Director and CEO of Santos, said: “In 2018, Santos delivered higher production in the onshore business and acquired Quadrant Energy which will provide a significant boost to our production in 2019.

“Our cash generative asset portfolio set new records for quarterly and annual sales revenues, notwithstanding the divestment of our non-core Asian assets during the year, while our low cost and disciplined operating model enabled more investment in exploration and appraisal to improve ongoing organic resource and reserve replacement.

“With the completion of the value accretive Quadrant Energy acquisition in November, we are now focused on integrating these low cost, long-life conventional assets and realising the AUS$30 million – AUS$50 million combination synergies per annum.

“I am pleased that Brett Darley, previously Quadrant’s CEO, has joined Santos to lead our Australian offshore business.

“In 2019, we will focus on our disciplined growth portfolio, including PNG LNG expansion, Barossa backfill to Darwin LNG, appraisal of the exciting Dorado oil discovery and lifting the drilling activity to grow production and appraisal activity in our onshore business.

“Santos is positioned for growth across each of our five core assets and we are targeting production of more than 100 million boe by 2025, almost double 2018’s level.”

Read the article online at: https://www.lngindustry.com/liquefaction/25012019/santos-releases-4q18-activities-report/

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Australia LNG news