JOHANNESBURG (miningweekly.com) – A turnaround strategy to deliver a low-cost, reliable and high-performance business at ASX-listed natural gas producer Santos' operations during 2017 progressed ahead of expectations, with the company now being stronger and more resilient, MD and CEO Kevin Gallagher said on Wednesday.
"In 2017, we reduced net debt by 23% to $2.7-billion, lowered our free cash flow breakeven oil price by 12% to $32 per barrel and delivered Australia's lowest-cost onshore operations," he highlighted.
Strong operating performance across the core assets resulted in sales volumes of 83.4-million barrels of oil equivalent (mmboe) exceeding the top end of its guidance and production of 59.5 mmboe being toward the top-end of the guidance.
Liquefied natural gas (LNG) sales volumes were up 10% to a record 3.1-million tonnes following continued strong performance from Papua New Guinea (PNG) LNG and the ramp-up of Gladstone LNG (GLNG). LNG sales revenues were up 33% to a record $1.2-billion.
"Santos' new operating model has set a disciplined framework to drive shareholder value as we seek to further reduce costs, build production and maximise operating cash flow," Gallagher said.
"In 2018, we will increasingly focus on the build and grow phases of our strategy as we progress growth opportunities in Northern Australia, PNG and Narrabri, and ramp-up drilling in the Cooper basin and GLNG," he added.