PERTH (miningweekly.com) – Oil and gas major Santos has reported a fall in production, revenue and underlying profits for the half-year ended June.

Production for the six months under review was down 13% on the previous corresponding period, to 45-million barrels of oil equivalent with sales volumes declining by 15% to 41.7-million barrels of oil equivalent, resulting in revenue falling by 21% in the same period, from $3.7-billion to $2.9-billion.

Santos told shareholders that production in the interim period was driven by lower domestic gas production in Western Australia, lower volumes from the Bayu-Undan operation as the field approached its end-of-life, and lower production in Papua New Guinea owing to natural field decline.

Underlying profits for the half-year were down 37% to $801-million while statutory net profits after tax were down by 32% to $790-million. Earnings before interest, taxes, depreciation, amortisation and exploration were down 23%, to $2.1-billion.

The company’s free cash flow from operations declined by 34%, to $1.12-billion.

MD and CEO Kevin Gallagher said Santos has delivered strong free cash flow and underlying earnings in the 2023 first half, despite an ever-changing macro environment.

“We remain focused on executing our strategy to backfill and sustain our existing infrastructure, decarbonise and develop our Santos Energy Solutions division. Our goal is to strike the right balance between disciplined and phased major project spend, returns to shareholders, and investment in new energy solutions to meet customer demand,” Gallagher said.

“Our Santos Energy Solutions division is expanding and continues to work on building new revenue sources through decarbonisation projects. The Moomba carbon capture and storage (CCS) project will be one of the biggest and lowest cost in the world and is on track for first injection of carbon dioxide (CO₂) next year.”

The Moomba CCS project was 70% complete at the end of the interim period, with $220-million spent on the project.

Following first injection, Moomba CCS will store up to 1.7-million tonnes of CO₂ a year, in the same geological reservoirs that held oil and gas in place for tens of millions of years.

At the $4.3-billion Barossa gas project, construction is some 60% complete, including the Darwin pipeline duplication project.

The Barossa project comprises a floating production, storage and offloading vessel, subsea production wells, supporting subsea infrastructure and a gas export pipeline tied into the existing Bayu-Undan to Darwin LNG pipeline.

First production from Barossa is targeted for the first half of 2025.

Meanwhile, construction of the $2.6-billion Pikka Phase 1 project was also 18% complete at the end of the interim period, with the project on track for first production in 2026.

Looking ahead at the full 2023 financial year, Santos has maintained its sales volume guidance at between 90-million to 100-million barrels of oil equivalent, and its production guidance at between 89-million and 93-million barrels of oil equivalent.