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

Technip Energies wins contract for Eni’s Coral Norte FLNG

France-based LNG engineering giant Technip Energies has won a contract for preliminary work on Eni's second FLNG project in Mozambique, Coral Norte (Coral North).

Victrol: LNG London hits bunkering milestone

The Shell-chartered inland bunkering vessel LNG London, owned by a joint venture of Belgium's Victrol and France's Sogestran, has reached a new operational milestone.

Himalaya’s LNG-fueled bulkers earned $34,500 per day in June

LNG-powered bulker owner Himalaya Shipping achieved average time charter equivalent earnings of about $34,500 per day in June.

More News Like This

Santos inks LNG supply deal with QatarEnergy’s trading unit

Australian LNG player Santos has signed a mid-term LNG supply deal with QatarEnergy Trading, a unit of state-owned LNG giant QatarEnergy.

Santos enters exclusive due diligence with Adnoc-led consortium

Australian LNG player Santos has entered into a process and exclusivity agreement with a consortium led by Adnoc's investment unit, XRG, related to the latter's $18.7 billion takeover offer.

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.