PERTH (miningweekly.com) – Oil and gas major Santos has reported record annual sales revenue, production and free cash flow, on the back of a strong fourth quarter

Sales revenue for the three months under review reached $1.9-billion, bringing 2022 sales revenue to a record $7.8-billion, up 65% on the previous year. Annual free cash flows also reached a record $3.6-billion in the full year, more than double the 2021 figures.

Production in the fourth quarter was reported at 25.6-million barrels of oil equivalent, down 2% on the 26.1-million barrels produced in the previous quarter, however, full year production reached 103.2-million barrels, a 12% increase on the previous full year.

Fourth quarter production was 2% lower than the third quarter primarily owing to lower domestic gas volumes owing to the temporary shutdown of John Brookes platform in Western Australia and two weeks of unplanned maintenance at the Papua New Guinea (PNG) operated assets.

Bayu-Undan production was steady compared to the third quarter, however it is expected to continue to decline and is anticipated to cease in early 2023.

MD and CEO Kevin Gallagher on Thursday told shareholders that the strong business performance reported in the full year positioned the company to benefit from higher commodity prices.

“Our increased liquefied natural gas (LNG) position in PNG following the Oil Search merger has driven our record performance. The LNG business is expected to remain strong with energy security being a top priority for our trading partners in the region,” Gallagher said.

“We remain committed to supplying the domestic market at reasonable prices. Average realised price for east coast domestic gas for the quarter was $7.74/GJ, less than half the average realised price for LNG.

“Given the strong customer demand for our product now and into the future, we will seek to backfill and sustain our core assets to deliver the critical fuels the world needs into the 2040s. But we will also seek to decarbonise these critical fuels, in-line with our emissions reductions targets, and produce clean fuels as customer demand evolves.”

Looking ahead at 2023, Santos told shareholders that production is now expected to be in the range of 89-million to 96-million barrels of oil equivalent, down from the previous estimate of between 91-million and 98-million barrels of oil estimate, primarily owing to the temporary shutdown of the John Brookes platform in Western Australia extending to around late January/early February, combined with a delay in commencement of production from the Spartan field into the second quarter owing to the repair works at John Brookes.

Capital expenditure (capex) guidance is maintained at approximately $1.2-billion in sustaining capex and approximately $1.8-billion for major projects.

The 2023 guidance includes PNG LNG at a 42.5% working interest. Guidance will be revised once the expected sell- down of the 5% interest has completed.