Santos’ profit surges on high prices

Australia’s Santos has reported record earnings in the first half of 2022, boosted by high oil and LNG prices.

The independent LNG producer said on Wednesday its underlying profit reached $1.27 billion, up 300 percent year-on-year, while statutory net profit after tax rose 230 percent to $1.16 billion.

Last month, Santos reported a record sales revenue and cashflow in the first half of this year.

Santos attributed the rise in its profit to significantly higher oil and LNG prices compared to the corresponding period due to stronger global energy demand combined with a higher interest in PNG LNG following the Oil Search merger.

The Australian LNG player said its average realized LNG price of $14.19 per MMBtu in the first half increased 111 percent when compared to $6.74 per MMBtu in the same period last year

Santos also said average crude oil price rose 67 percent to $116.28 per barrel.

The company intends to return $605 million to shareholders (equivalent to 18 cents per share) under the company’s capital management framework.

PNG LNG talks

Santos is also in “advanced discussions” with shortlisted counterparties for the sale of a five percent interest in the PNG LNG project.

“Throughout this process, there has been strong interest from reputable counterparties with expected proceeds in-line with market consensus valuation,” it said.

Santos aims to retain a 37.5 percent stake in PNG LNG. ExxonMobil has a 33.2 percent operating interest in PNG LNG.

CEO Kevin Gallagher said Santos delivered record production, free cash flow and underlying earnings in the first half 2022 as the company benefited from “strong customer demand for our products and higher commodity prices.”

“Demand for our products has remained strong in both Australia and internationally, due to increased demand and shortages of supply from producing nations due global underinvestment in new supply,” Gallagher said.

“We are seeing these issues play out in the significant shift in global energy policy towards energy security as a key priority,” he said.

Pikka FID

Santos, as operator of the Pikka Unit joint venture, also announced that a final investment decision (FID) had been taken to proceed with the $2.6 billion gross ($1.3 billion Santos-share) Pikka Phase 1 oil project located on the North Slope of Alaska.

Pikka Phase 1 is expected to produce 80,000 barrels a day of oil gross with first oil anticipated in 2026.

Santos has a 51 percent interest in the Pikka Unit, while Repsol holds the remaining interest.

Most Popular

LNG carrier arrives to load first LNG Canada cargo

The 174,000-cbm GasLog Glasgow has arrived at the LNG Canada jetty in Kitimat to load the first LNG cargo produced at the Shell-led terminal, an LNG Canada spokesperson told LNG Prime on Saturday.

Coastal Bend LNG plans large Texas export plant

Coastal Bend LNG said it had initiated development of a 22.5 million ton per annum (mtpa) natural gas liquefaction and export facility on the Texas Gulf Coast.

HD Hyundai Samho scores contract to build LNG carrier quartet

South Korea’s HD Hyundai Samho has secured an order to build four liquefied natural gas (LNG) carriers for about $1.03 billion.

More News Like This

Santos: Barossa project in final stages of commissioning

The Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is now in the final stages of commissioning following the arrival of the BW Opal FPSO at the Barossa gas field.

Santos gets $18.7 billion takeover offer from Adnoc-led consortium

Australian LNG player Santos has received a takeover offer valued at $18.7 billion from a consortium led by Adnoc's investment unit XRG.

Santos: PNG LNG shipped 28 cargoes in Q1

The ExxonMobil-operated PNG LNG project in Papua New Guinea shipped 28 cargoes of liquefied natural gas in the first quarter of 2025, up by one cargo compared to the same quarter last year and one cargo less compared to the prior quarter, according to shareholder Australia’s Santos.

Santos: Barossa project 95.2 percent complete

The Barossa gas project, which will supply feed gas to the Santos-operated Darwin LNG plant, is 95.2 percent complete and remains on target for first production in the third quarter of 2025, Santos said on Thursday.