PERTH (miningweekly.com) – Oil and gas major Santos has reported a 6% increase in production during the third quarter ended September, while sales revenue increased by 10%.
“Santos’ third-quarter results serve to highlight the benefits of a cash generative core asset portfolio and our low-cost, disciplined operating model,” said Santos MD and CEO Kevin Gallagher.
Production for the three months ended September reached 15-million barrels of oil equivalent (BOE), up from the 14.2-million BOE produced in the previous quarter, while sales volumes were up by 7% to 20.3-million BOE.
Sales revenue for the third quarter reached $973-million, on the back of the higher sales volumes and a 3% increase in the average realised oil price.
Santos said on Thursday that production in the third quarter was higher owing to strong production across the company’s core assets, including its Papua New Guinea liquefied natural gas operation, which produced at record rates following the earthquake-related shutdown in the first half of the year, and the planned one-month maintenance shutdown of the Bayu Undan/Darwin facilities, in May.
“With the balance sheet now supportive of growth, we also announced the value accretive acquisition of Quadrant Energy’s high-quality portfolio of low-cost, long-life conventional natural gas assets in Western Australia, that will further reduce our free cash flow breakeven oil price and importantly, significantly enhance our operating capability,” Gallagher said.
“The acquisition will also give us a leading position in a highly prospective Bedout basin, including the recent significant Dorado 1 oil discovery.”
Santos will pay $2.15-billion for Quadrant Energy, which claimed 19-million BOE production in 2017.
“Santos is now positioned for growth with a number of upstream brownfield development opportunities leveraging existing infrastructure positions across each of our five core assets and is targeting production of more than 100-million BOE by 2025, almost doubling current levels of production,” Gallagher said.