Santos has delivered a record production result while also announcing a huge gas find off the WA coast
Santos has delivered a record-breaking March quarter along with a “fantastic” gas discovery off the Western Australian coast.
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Santos has delivered a record-breaking March quarter along with a “fantastic” gas discovery off the Western Australian coast.
The Adelaide-based energy company said quarterly production of 18.4 million barrels or oil equivalent was 18.4 mmboe was a record for Santos and 33 per cent up on the previous corresponding quarter.
The result was “primarily due to sustained strong asset performance and the acquisition of Quadrant Energy’’.
Sales revenue was up 28 per cent to $1.015 billion - the second highest in the company’s history.
Santos acquired Quadrant Energy last year in a $2.15 billion deal, snapping up Quadrant’s 80 per cent stake in the promising Dorado oil find.
“In the second quarter, we look forward to continued drilling success, including commencing appraisal of the ... Dorado oil discovery offshore Western Australia”, chief executive Kevin Gallagher said.
Revenue growth was slightly held back by lower oil and liquefied natural gas prices, with domestic gas prices also lower due to pricing adjustments on a contract booked in the previous quarter and cyclone-related shutdowns, Santos said.
Net debt as at March 31 was $3.4 billion, down from the prior quarter, while the company also paid off $1.1 billion in gross debt during the quarter.
Santos’ net debt rose after the Quadrant buy, which it funded through a combination of cash and new debt.
The company has radically restructured its business in the last two years by divesting non-core Asian assets and implementing sharp cost cuts to slash debt.
On the exploration front, the company said the Corvus-2 gas discovery was “one of the largest columns (of gas) ever discovered across the North West Shelf’’, coming in at 638m.
Santos owns 100 per cent of that project.
“The field is approximately 28km from the Reindeer platform, which delivers gas to the Devil Creek domestic gas plant near Karratha, and about 62km to a Varanus Island tie-in point,’’ Santos said.
Mr Gallagher said the result had opened up a number of additional exploration opportunities in the region.
“It is particularly exciting to have realised a higher liquids content and significantly bigger resource volume than we expected,’’ he said.
“It’s a great start to our 2019 offshore drilling campaign, and it also highlights the value of the Quadrant acquisition and our strategy of pursuing upstream brownfield growth opportunities around existing infrastructure.”
The rig will now move on to drill at Dorado. Elsewhere the company drilled 26 wells in the Cooper Basin (85 per cent success rate) and 87 in Gladstone LNG (100 per cent success rate).
RBC said Santos was “tracking more or less in line with our expectations to start the year’’.
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