The Adelaide headquartered oil and gas company’s March quarter results show it generated a record $US1.91 billion ($A2.6 billion) from oil, gas and LNG sales to start the year – up 25 per cent on the last quarter of 2021.

The windfall represents nearly a doubling of Santos’ sales revenue compared to the same quarter last year, when it posted $US964 million.

The company also generated a record free cash flow of $US865 million to start 2022 – up 186 per cent on Q1 2021.

Santos has achieved the record result without a substantial increase in the volume of its oil and gas sales, which have increased only eight per cent from Q4 2021 and just three per cent from Q1 2021.

Santos attributed this quarter’s sales revenue windfall to increased commodity prices around the world and the completion of its merger with Papua New Guinea’s Oil Search in December.

Oil and gas prices have been surging amid the war in Ukraine, with countries in Europe and Asia looking for alternative sources of energy to Russia – the world’s biggest natural gas exporter.

Santos managing director and CEO Kevin Gallagher said the company had positioned itself to capitalise on the commodity price rise.

“By designing our portfolio to provide strong cash flows throughout the commodity price cycle, our disciplined, low-cost operating model has positioned us to take full advantage of the increase in commodity prices,” Gallagher told the ASX.

Santos’ most significant sales revenue increase came from its LNG portfolio, which generated $US1.11 billion in revenue this quarter, up from $US791 million in Q4 2021.

Its crude oil revenues also increased from $US240 million to $US309 million.

The company earlier in the week announced a share buyback of $US250 million ($A339 million) to boost shareholder returns, with Gallagher arguing the company’s “current share price undervalues the company”.

Santos shares increased 14 cents to $8.37 on Thursday but have dropped down back down to $8.20 this morning.