Santos has boosted its 2025 production target 20% from the already ambitious target it set only in December.
In its 2019 and December quarter report the country’s second-biggest oil and gas group (after Woodside) revealed that it would now aim at producing 120 million barrels of oil equivalent (mmboe) products by 2020, up from the December target of 100 million mmboe.
CEO Kevin Gallagher said Santos was in a position to benefit strongly from growing global demand for natural gas, which he said was “forecast to supply a quarter of the world’s total energy demand by 2040”.
“Santos, with its portfolio of long-life natural gas assets, is well-positioned to benefit as we seek to deliver 120 mmboe of production by 2025,” he added.
For 2020 Santos has set a target of between 79 mmboe and 87 mmboe.
That was after the company reported production of 75.5 million barrels of oil equivalent (mmboe) in 2019 – up 28 per cent from 58.9 mmboe the previous year.
The report says Santos sold 94.5 mmboe over the year, up from 78.3 mmboe in 2018 – with record sales revenue of $US4.03 billion, up from $US3.66 billion in 2018.
Santos CEO Kevin Gallagher said in a statement that the company had also delivered lower unit production costs and strong cash flow in 2019.
He said the company the ‘’highest ever free cash flow of more than $US1.1 billion’’ in 2019,
Santos has provided guidance for 2020 of producing between 79 mmboe and 87 mmboe, up from 75.5 mmboe last year, and selling between 99 mmboe and 107 mmboe, up from 94.5 mmboe in 2019.
Santos expects capital expenditure to decline from just over $US1 billion to around $US950 million.
Production slowed slightly in the fourth quarter to 18.7 million barrels of oil equivalent (mmboe), down from 19.8 mmboe the previous quarter, but it maintained the same sales revenue as oil prices increased from $US70.22 up to $US73.49. Production costs were about 10% lower in 2019 than in 2018 (thanks to a greater increased production).
Santos shares rose 0.8% to $8.95.
