Santos Provides 2018 First Quarter Activities Report

Santos Managing Director and Chief Executive Officer Kevin Gallagher said: “Santos’ first quarter results highlight the benefits of a diversified portfolio of natural gas assets underpinned by a disciplined operating model focused on cash generation.”

“In the first quarter of 2018, we generated $246 million in free cash flow, reduced net debt by 8% to $2.5 billion and maintained our 2018 forecast free cash flow breakeven at ~US$36/bbl, despite the significant increase in drilling activity in Queensland and the Cooper Basin, and the temporary shutdown in PNG following major earthquake activity.”

“This clearly demonstrated the resilience of our diversified portfolio of core assets and we are now beginning to enjoy the sustained benefits of our low cost, high efficiency operating model, with strong free cash flow generation further strengthening our balance sheet and setting us up for future growth.”

“As a result of our strong cash flows that enabled net debt to be reduced by a further 8% to $2.5 billion over the quarter, Santos is now set up to reap the benefits of higher oil prices and continue to build value for our shareholders. If current oil price levels continue throughout 2018 then we will achieve our end-2019 net debt target sometime in the second half of 2018, more than a year ahead of plan.”

“In late February, we were deeply saddened by the loss of life and personal injury suffered by communities in Papua New Guinea as a result of the severe earthquake in the region. Our PNG LNG expertise and resources were deployed to assist the humanitarian relief effort and Santos donated US$200,000 to help provide urgently needed food, water and medical supplies to more than 30,000 people isolated in remote villages.”

“PNG LNG has now safely resumed LNG production, ahead of ExxonMobil’s eight-week estimate, with LNG exports expected to resume shortly. Santos carries appropriate property damage and business interruption insurance for its assets.”

“I would like to thank ExxonMobil, our joint venture partners and the PNG Government for all their efforts in safely resuming production. Santos looks forward to continuing to work with our local communities in PNG who still have a long road to recovery following the loss of life, homes and crops caused by the earthquake,” Mr Gallagher said.

The temporary PNG LNG shutdown, combined with planned maintenance at our facilities in Moomba and in Queensland, reduced first quarter production by 1.2 mmboe to 13.8 mmboe. Excluding these shutdowns, production would have been in line with the prior quarter.

On 3 April 2018, Santos announced it had received an unsolicited, non-binding and indicative proposal from Harbour Energy to acquire 100 percent of Santos shares by way of a scheme of arrangement.

“We will engage with Harbour Energy on its proposal to determine whether an offer for the company that is capable of recommendation by the Board for consideration by shareholders, can be developed,” Mr Gallagher said.

“Regardless of the outcome of engagement with Harbour, our strong free cash flows, sustainable low cost base, stable production out to at least 2025 and the resilience of our diverse natural gas asset portfolio mean Santos is very well positioned to drive value for our shareholders going forward. When combined with the continued progress of our key growth projects in Northern Australia and PNG and our strong opportunity set built around existing infrastructure and our core natural gas assets, Santos is in a great position to increase its value over the medium and longer term.”


The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s