Santos, the oil and gas company, announced that its fourth-quarter production saw a modest increase compared to the prior quarter, marking a strong end to 2023. However, it highlighted the need for additional investment in its Barossa gas project before production can commence.
Production Figures
During the final three months of the year, Santos recorded a production of 23.4 million barrels of oil equivalent, slightly higher than the previous quarter. The company also stated that its full-year production is in line with expectations, at the higher end of guidance. Notably, sales revenue for the quarter reached US$1.5 billion.
Positive Financial Outcomes
Chief Executive Kevin Gallagher expressed his satisfaction with the financial results, stating that the fourth quarter brought the company’s free cash flow for the full year to an impressive US$2.1 billion. Despite the challenges faced throughout the year, Gallagher sees this achievement as positioning Santos well for delivering shareholder returns, supporting existing operations, completing major projects (such as Barossa and Pikka), advancing decarbonization plans, and growing their Santos Energy Solutions business.
Barossa Gas Project Progress
Regarding the Barossa gas project, Santos revealed that it is currently 66.4% complete. Furthermore, drilling has resumed following the approval of a revised environment plan. The company also noted that one third of the Barossa gas export pipeline has been installed thus far and highlighted the recent lifting of an injunction following a legal challenge.
In conclusion, Santos ended 2023 on a positive note with a slight increase in production. Although further investment is needed for the Barossa gas project, the company remains optimistic about its ability to deliver returns to shareholders and achieve its strategic goals.
Santos Provides Updates on Barossa Project
Santos, an energy company, has announced that an additional capital expenditure of US$200 million to US$300 million will be required for the Barossa project. The total capital expenditure for the project is expected to be around US$4.5 billion to US$4.6 billion. The company anticipates the first gas extraction to commence in the third quarter of 2025.
According to Gallagher, a representative of Santos, the team has worked diligently to manage costs and adhere closely to the original schedule despite the challenges faced over the past two years. He acknowledged their exceptional efforts in handling the delays while minimizing expenses.
In relation to a potential merger with Woodside, Santos confirmed that they have entered into discussions with Woodside to exchange relevant information in order to evaluate the potential benefits of such a collaboration. However, Santos stated that they are also exploring other alternatives and no definitive decision regarding any transaction has been reached at this time.
Santos has provided the production and sales volume guidance for 2024, estimating oil equivalent production to be between 84 million and 90 million barrels. Sales volumes are projected to range from 87 million to 93 million. The company has maintained its guidance for 2023. The financial results for 2023 will be disclosed on February 21.