Australia's No.2 independent gas producer Santos Ltd on Thursday posted a 89% jump in half-year profit, boosted by its acquisition of Quadrant Energy and strong output from its Cooper Basin fields in South Australia.
Santos acquired Quadrant Energy last year in a $2.15 billion deal and in turn got an 80 percent stake in the promising Dorado oil find.
The Adelaide-based gas producer on Thursday increased its forecast on savings from the acquisition to between $50 million and $60 million per year, from $30 million to $50 million.
The Quadrant assets, along with the gas-rich Cooper Basin in Queensland, is the largest source of gas for Santos which also operates in Papua New Guinea.
It also lowered its capital spending forecast for the year to between $950 million and $1.05 billion, from about $1.1 billion.
Santos' underlying profit for the half-year ended June 30 rose to $411 million from $217 million a year earlier, beating Citi estimates of $377 million.
The company declared an interim dividend of 6 cents a share, compared with 3.5 cents last year when it revived payouts after grappling with debt for more than two years.
As part of creating value, Parsley Energy is also divesting what it called “tail-end inventory” in the Southern Midland Basin for about $170 million.
The parties must now renegotiate a deal that would transfer Breitburn's Permian reserves to investors including Elliott and WL Ross through their participation in a $775 million rights offering.
One of the three research analysts covering SandRidge has written off the deal, acknowledging the merits of concerns by investors including Carl Icahn.