Oz Santos H1 Underlying Profit Up 89%

Australian Santos August 22 said its underlying profit during the six months to June (H1 2019) jumped 89% year on year to US$411mn owing to successful acquisition of Quadrant Energy last year and higher LNG prices.

“Today’s announcement of half-year results demonstrates the strength of our cash-generative operating model and the successful integration of the Quadrant acquisition,” Santos CEO Kevin Gallagher said.

The CEO stated that the company is increasing guidance on combination synergies resulting from the Quadrant deal to between US$50-$60mn/year from US$30-50mn/yr announced earlier. Santos completed the US$2.15bn acquisition of a smaller Australian producer Quadrant Energy in November last year.

Production was up 32% year on year to 37mn barrels of oil equivalent, mainly due to the resumption of full production in Papau New Guinea following the impact of the earthquake and the inclusion of Quadrant Energy. This was partly offset by the sale of the Asian assets in September 2018, Santos said. The company has maintained the 2019 full-year production guidance at 73-77mn boe. Average realised LNG price was up 11% year on year to US$9.97/mn Btu.

Santos said it would be supplying more than 70 petajoules of gas to the Australian east coast market in 2019; approximately 14% of demand. The company is supportive of a prospective gas reservation scheme that is complementary to a robust LNG export framework, it said.

Santos added that its LNG portfolio is well positioned with strong long-term contracts and brownfield backfill and expansion opportunities at Darwin LNG and PNG LNG. Gladstone LNG is on track to meet about 6mn metric tons/year annualised sales run-rate including LNG volumes redirected to the domestic market by the end of 2019, it said.