Santos swings to 2018 profit

Australian LNG player Santos turned a profit for 2018 following a net loss in the previous year. 

The company noted the net profit for the year 2018 reached $630 million compared to a $360 million net loss in 2018.

Santos managing director and CEO Kevin Gallagher said the company a record $2.2 billion and free cash flow up 63% to a record of more than $1 billion.

“Underlying profit after tax more than doubled to a record $727 million. Santos is now on a firm path to grow production and reserves,” Gallagher said.

He said the recent completion of the acquisition of Quadrant Energy will provide a significant boost in Santos’ production in 2019, with the company targeting production of between 71 and 78 mmboe.

“The acquisition, combined with organic reserves additions, contributed to strong reserves growth in 2018 with 2P reserves increasing by 20% to over one billion barrels of oil equivalent. Contingent resources increased to 1.8 billion barrels,” he said.

In 2018, Santos drilled a record 305 wells, 77 percent higher than 2017. During the year the 480-well Roma East field development was sanctioned with 121 wells drilled by year-end and the Scotia CF1 field project delivered. The 148-well Arcadia Phase 1 development was also sanctioned during the year with the first wells due on-line in the first quarter of 2019.

“In Northern Australia, Darwin LNG remains an important and strategic infrastructure project for the future development of onshore and offshore resources. Plant performance in 2018 was again strong with LNG production higher than in 2017,” Gallagher said.

“The Barossa project is being progressed as the lead candidate to backfill Darwin LNG with a final investment decision targeted by late 2019 or early 2020,” he said.

In PNG, plant upgrades resulted in a record daily production rate equivalent to 9.2 mtpa being achieved in the second half of the year.

PNG LNG expansion opportunities continue to be progressed with provisional results from the Muruk-2 appraisal well indicating the objective Toro reservoir is likely hydrocarbon bearing, Gallagher said.