PERTH (miningweekly.com) – Oil and gas major Santos has delivered record first half revenues of $3.8-billion, which was up by 85% on the previous corresponding period, while free cash flows were up 199% to $1.7-billion.

Production for the half year also reached record heights at 51.5-million barrels of oil equivalent, up 9% on the previous corresponding period, while sales volumes were up 4% in the same period to 53.8-million barrels.

Santos MD and CEO Kevin Gallagher said the record production, sales revenue and free cash flow in the first half of 2022 demonstrated the strong performance of the base business and strategic benefits of its diverse portfolio, despite a number of major planned shutdowns in the second quarter.

“Santos is positioned as a leading and reliable liquefied natural gas (LNG) supplier into Asia and we are well placed to take advantage of growing Asian demand for LNG, which is forecast to double by 2050,” Gallagher said.

“At the same time, we supported the domestic gas market during a period of extreme demand by diverting gas from Gladstone LNG and committing to a fifth drilling rig in the Cooper basin during the quarter.

“Despite the period of price and demand volatility, Santos domestic gas customers paid significantly less than that paid by international customers. These domestic prices are reflective of the long-term contracts that almost all of our Australian customers are on, rather than much publicised spot domestic market prices, which make up approximately only 10% of the east coast gas market,” said Gallagher.

“Our new capital management framework announced in April combined with strong free cash flows position us well to provide returns to shareholders at the half-year results in August.”

Looking at the full year, Santos has narrowed its production guidance from the previous 100-million to 110-million barrels of oil equivalent, to between 102-million and 107-million barrels of oil equivalent, while sales volumes have been narrowed from between 110-million to 120-million barrels, to between 110-million and 116-million barrels of oil equivalent.

Major projects capital expenditure guidance is lowered slightly from between A$1.15-billion and A$1.3-billion, to between A$1.1-billion and A$1.2-billion, reflecting timing of expenditures which are expected to be weighted to the second half.

Production cost guidance is lowered to between $7.90/barrel of oil equivalent and $8.30/barrel of oil equivalent, while depreciation, depletion and amortisation is expected to be approximately $850-million in the first half and approximately $1.7-billion for the full year.