The state’s biggest company reported its fourth-quarter results for the 2020 calendar year to the Australian Securities Exchange this morning.

The oil and gas giant produced 25.4 million barrels of oil equivalent (mmboe) in the December quarter to take its 2020 production to a record 89 mmboe, up 18 per cent on 2019.

Its annual sales volume of 107.1 mmboe was also a record and generated sales revenue of almost $4.4 (US$3.4 billion). However, this was well down on the $5.2 billion (US$4.033 billion) it generated in 2019.

Fourth-quarter sales volumes were up 16 per cent to $1.2 billion (US$922 million), which the company said was the result of stronger LNG sales and prices.

It said Santos’ disciplined operating model continued to drive costs lower, with 2020 upstream unit production costs of about US$8/boe at the lower end of the US$8.00-8.50/boe guidance range

Santos managing director and chief executive officer Kevin Gallagher said the company’s Barossa project off the Darwin coast was on-track for a final investment decision in the first half of 2021.

“Significant milestones were achieved on the Barossa project during the fourth quarter, including the signing of a binding long-term LNG offtake agreement with Mitsubishi at a price based on JKM and execution of the gas transportation and processing agreements with Darwin LNG,” he said.

“Our consistent and successful strategy combined with the disciplined, low-cost operating model continues to drive strong performance across our diversified asset portfolio and position us for disciplined growth,”

Santos generated more than $930 million (US$725 million) in free cash flow in 2020 despite lower commodity prices with a free cash flow breakeven oil price of less than US$25 per barrel (before hedging) and less than US$20 per barrel (after hedging).

“2020 saw us ride through the bottom of the cycle while still generating free cash flow and deliver a record 4.3 million tonnes of Santos-equity LNG sales,” Gallagher said.

“We remain focused on controlling our costs and living by our disciplined operating model so we are set up to sustain our base business and remain resilient through the cycle even as we see the welcomed strengthening in prices over the past months.”

Gallagher said the company’s Moomba carbon capture and storage project in the northeast of South Australia was ready for a final investment decision, subject to eligibility for Australian Carbon Credit Units.

“We also announced in December an ambitious roadmap to net-zero emissions by 2040, new emissions reduction targets and a commitment to work with our customers to reduce their emissions,” he said.

Santos will announce its full results for the 2020 calendar year on February 18.

Last year was also a tough year for Santos shares, which began 2020 at $8.35 and finished on $6.35 after bottoming out at $2.75 in March.

However, the company’s position has improved in the first three weeks of the year to a share price of $7.41 at noon today and a market capitalisation of $15.41 billion.

Santos was again ranked No.1 in InDaily’s SA Business Index annual listing of South Australia’s top 100 businesses in 2020.