Santos pumps up oil production outlook
Santos has released new guidance on oil production that more than doubles its 2018 output.
Santos has boosted its 2025 oil production target to 120 million barrels of oil equivalent from its previous forecast of 100m boe and reduced its break-even oil price to under $US30 a barrel.
The South Australian producer said the new guidance, more than double its 2018 output, represents an annual growth rate of 8 per cent over the next six years as it factors in the recent deal to buy ConocoPhillips’ Northern Australian oil and gas interests.
Its forecast free cash flow break-even oil price has been lowered to $US29 a barrel from a previous $US31 target while it also narrowed both its production and sales guidance for the 2019 financial year.
READ MORE: PNG pressures Exxon to commit to gas field | Woodside warns of competition
It now expects 2019 production in a range of 74m to 76m boe from a 73m to 77m boe range and sales volume guidance of 93m to 95m boe from a 90m to 97m boe target prior.
Production in 2020 is expected to lift to between 79m and 87m boe after factoring in an expected selldown in its Barossa assets acquired from the Conoco deal.
“Our strategy has been to establish a disciplined low-cost operating model that delivers strong cash flows through the oil price cycle,” chief executive Kevin Gallagher said in a statement ahead of its annual investor day on Tuesday. “We are now positioned for disciplined growth leveraging existing infrastructure in all five of our core assets, which we believe will deliver 120 mmboe by 2025.”
Meanwhile fellow energy player Woodside Petroleum said it expected to sign off on a final investment decision for its $3 billion Senegal oil project by the end of December after submitting a development plan to the nation’s government.
The Sangomar project - the first oil project in the West African country - aims to deliver 100,000 barrels a day of oil from early 2023 through a floating production storage and offloading facility.
The West Australian producer said the development and exploitation plan and represent the last major regulatory submissions required before final investment decisions can be made later this month once approvals are received.
“The submission of the Exploitation Plan and authorisation request is the culmination of front-end engineering design activities. These are the final documents required by the Government ahead of granting approval to proceed,” Woodside chief executive Peter Coleman said.
Woodside owns a 35 per cent stake in the Sangomar venture alongside Cairn Energy with 40 per cent, Australia’s Far Limited with 15 per cent and Petrosen the 10 per cent balance.