Santos Ltd., Australia's No. 2 independent gas producer, reported on Feb. 21 a more than two-fold rise in annual underlying profit, helped by the acquisition of Quadrant Energy assets and higher realized prices for its oil and gas.
Underlying profit for 2018 rose to a record $727 million from $318 million a year earlier. Four analysts on an average had expected underlying profit of $609.5 million, according to Refinitiv data.
The Adelaide-based company declared a final dividend of 6.2 cents a share. It had revived the payout policy with an interim payment for the half-year ended June 30, 2018, following a more than two-year lull.
The company said it would allocate about $1.1 billion as capex for full-year 2019 and affirmed estimates for production and sales volumes announced last month.
CEO Kevin Gallagher said the Quadrant acquisition, combined with organic reserves additions, contributed to strong reserves growth in 2018.
Firm LNG prices, coupled with sharp cost cuts and asset sales enabled Santos to achieve its debt target over a year ahead of plan in October 2018.
By slashing debt, Santos set itself up to stave off takeover offers, revive its dividend and hunt for assets to expand its portfolio. It acquired Quadrant, the biggest gas supplier to the domestic market in Western Australia, for more than $2 billion last year, boosting production.
RELATED: Santos Expands With $2.15 Billion Quadrant Takeover
However, the acquisition of Quadrant, using cash and new debt, pushed Santos' debt to $3.6 billion as of Dec. 31.
In September, Santos had outlined its growth strategy, planning to nearly double production to more than 100 million barrels of oil equivalent by 2025.
Shares of the company have inched up 0.6% in 2018 and have risen more than 26% so far this year.
Recommended Reading
TGS, SLB to Conduct Engagement Phase 5 in GoM
2024-02-05 - TGS and SLB’s seventh program within the joint venture involves the acquisition of 157 Outer Continental Shelf blocks.
Geothermal ‘Could Save the World,’ but Faces Familiar Subsurface Risks
2024-03-20 - CERAWeek panelists discussed hurdles to widespread use of Earth’s heat to generate power — problems familiar to oil and gas operators.
TGS Commences Multiclient 3D Seismic Project Offshore Malaysia
2024-04-03 - TGS said the Ramform Sovereign survey vessel was dispatched to the Penyu Basin in March.
PGS Wins 3D Contract Offshore South Atlantic Margin
2024-04-08 - PGS said a Ramform Titan-class vessel is scheduled to commence mobilization in June.
Tech Trends: AI Increasing Data Center Demand for Energy
2024-04-16 - In this month’s Tech Trends, new technologies equipped with artificial intelligence take the forefront, as they assist with safety and seismic fault detection. Also, independent contractor Stena Drilling begins upgrades for their Evolution drillship.