Strong free cash flow from operations at Santos
Key points
- Free cash flow from operations ~$1.1 billion in first half
- Production up 1% to 22.2 mmboe, sales volumes up 3% to 23.9 mmboe
- Unit production cost guidance narrowed to $7.00-$7.40/boe
Full summary
Santos reported strong free cash flow from operations of ~$1.1 billion in the first half, with production increasing 1% to 22.2 mmboe and sales volumes up 3% to 23.9 mmboe compared to the prior quarter. The company narrowed its unit production cost guidance to $7.00-$7.40 per boe following a strong first half performance. Major development projects, including Barossa LNG and Pikka phase 1, continued to progress on schedule, with Barossa on track for first gas in the third quarter. The Moomba Carbon Capture and Storage project also reached the milestone of one million tonnes of CO2 stored. Santos' credit ratings were maintained at investment grade by Moody's, S&P, and Fitch, reflecting the company's disciplined capital management and low-cost operating model. The company saw strong demand and pricing for its high heating-value LNG, and recently signed a contract with QatarEnergy Trading LLC to leverage the flexibility of its LNG portfolio.
Guidance
Production volumes guidance narrowed to 90-95 mmboe, with sales volumes expected in the upper half of the previous 92-99 mmboe guidance. Capital expenditure guidance for major development projects and sustaining capital is unchanged. Depreciation, depletion and amortisation is expected to be ~$1.8 billion.
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