PERTH (miningweekly.com) – Oil and gas major Santos has reported an 89% hike in underlying profits for the half-year ended June, while net profits after tax soared by 273%.

Underlying profits for the half-year reached $411-million, up from the $217-million reported in the previous corresponding period, while net profit after tax increased from $104-million to $338-million in the same period.

Earnings before interest, taxes, depreciation and amortization in the same period also increased by 43%, from $883-million to a record $1.26-billion.

Sales revenue for the interim period was up by 18%, to $1.97-billion on the back of higher liquefied natural gas (LNG) prices and volumes, with the resumption of full production from the Papua New Guinea LNG operation, following an earthquake in the first half of 2018, as well as higher gas volumes due to the acquisition of Quadrant Energy.

Sales volumes in the first half of 2019 reached 45.2-million barrels of oil equivalent, up from the 38-million barrels achieved in the first half of 2018.

MD and CEO Kevin Gallagher told shareholders on Thursday that the consistent application of the company’s disciplined operating model continued to deliver cost reduction and efficiencies in the period under review, with normalized production cost down by 5%, to $7.27/barrel of oil equivalent.

“Our forecast free cash flow breakeven oil price for 2019 is now reduced to around $31/bl, in line with 2018, notwithstanding higher capital expenditure this year. Every $10 per barrel increment in average oil price above our free cash flow breakeven increases annual free cash flow by between $300-million to $350-million,” he said.

Gallagher said that the interim results also demonstrated the successful integration of the Western Australian business following the acquisition of Quadrant.

“We are today increasing our guidance on combination synergies to between $50-million and $60-million a year,” he added.

Furthermore, Santos is also advancing its plans to increase production to more than 100-million barrels of oil equivalent by 2025, progressing work on its Barossa and P’nyang assets, while continuing drilling work in the Cooper basin and at the Gladstone LNG project.