South Australia’s largest company this morning announced that net profit after tax had risen to $US674 million ($A1 billion) for the year ended December 31, while revenue from ordinary activities climbed 10 per cent, to $US4.03 billion.

The company produced 75.5 million barrels of oil equivalent (mmboe) in 2019 – towards the upper end of its production guidance of 74 to 76 mmboe, published in December.

Underlying profit – which excludes the impact of asset acquisitions among other things – fell one per cent, to $US719 million for the 2019 calendar year, from $US727 million a year ago.

But free cash flow was up 13 per cent to $US1.14 billion, and EBITDAX (earnings before interest, tax, depreciation, depletion, exploration, evaluation and impairment) were up 14 per cent to $US2.46 billion.

The company today declared a final dividend of five US cents per share, bringing full-year dividends to 11 cents per share – up from 9.7 cents in 2018.

Santos managing director and CEO Kevin Gallagher said in a statement to the ASX this morning that the company had created efficiencies and reduced costs, bringing normalised production costs down by eight per cent, to $US6.97 per barrel of oil equivalent.

“Consistent application of our disciplined operating model continues to deliver cost reductions and efficiencies,” said Gallagher.

“The year was highlighted by record onshore drilling performance, lower unit costs, sucessful integration of the Quadrant acquisition and significant progress on our diversified portfolio of growth projects.”

Santos acquired Quadrant, a leading supplier of gas to Western Australia, in late 2018.

Gallagher said the Santos was making steady progress on a number of projects.

“Following completion of the ConocoPhillips’ acquisition, we expect to take a final investment decision on the Barossa project to backfill Darwin LNG in the second quarter,” he said.

“The Barossa and DLNG (Darwin LNG) partners are in advanced discussions to finalise the processing agreement for Barossa gas to support a final investment decision.”

Santos’ final aim is for Barossa gas field to feed the Darwin LNG plant.

There is a roughly 18-month gap between when the Bayu-Undan gas field that feeds the Darwin plant is set to run dry in 2022 and when Barossa is due to start producing.

However, Santos has been looking for ways to extend the life of Bayu-Undan.

Santos also said it was targeting a preliminary engineering design entry decision for its Dorado project, the biggest Australian oil find in more than two decades, in the second quarter.

Santos was ranked number one in InDaily‘s 2019 SA Business Index – an independent ranking of South Australia’s top 100 companies.

– with AAP.