Santos hits record figures for 2018 on rising prices

Australian LNG player Santos, the operator of the GLNG project, reported record sales revenue for the fourth quarter and the year 2018. 

Quarterly sales revenue hit $1.04 billion, 7 percent above the $937 million recorded in the previous quarter.

Santos noted in its report the sales revenue for the 12 months reached $3.7 billion, 19 percent above $3.1 billion recorded in 2017.

Quarterly revenue was boosted by the record quarterly LNG sales revenue that jumped 11 percent to $449 million.

Fourth quarter sales revenues were higher than the prior quarter primarily due to higher average LNG and domestic sales gas prices and the completion of the acquisition of Quadrant Energy in November.

Annual LNG production was lower than the prior year primarily due to the GLNG joint venture partners diverting about 40 PJ of gas to the domestic market. The diverted gas, originally slated for export cargoes and equivalent to ~0.7 million tonnes of LNG, was sold to east coast domestic customers. When combined with 4.8 million tonnes of LNG exported, annual LNG-equivalent production was ~5.5 million tonnes.

Gladstone LNG facility shipped a total of 80 cargoes during the year with additional 98 and 54 coming from the PNG LNG and Darwin LNG facilities, totaling 232 cargoes for the year, with an average realized LNG price of $9.91 per mmBtu.

Santos said that 92 wells were drilled across the GLNG acreage in the fourth quarter with a record number of wells drilled (305) and connected (300) in 2018. In 2019, 350-400 wells are expected to be drilled.

Excluding the acquisition of Quadrant Energy, 2018 sales volumes of 77.2 mmboe were above the upper end of guidance (74-76 mmboe) and production of 57.1 mmboe was within guidance (56-58 mmboe), the report says.

Santos expects 2019 sales volumes to be in the range of 88-98 mmboe and production to be in the range of 71-78 mmboe.

Santos Managing Director and CEO Kevin Gallagher said, “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.”