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Santos profits soar on back of rising prices

Adelaide-based Santos has reported record earnings, profit and production in the first half of 2022 on the back of increased demand and rising oil and LNG prices.

Aug 17, 2022, updated Aug 17, 2022

The company reported on Wednesday a half-year net profit after tax of $US1.167 billion ($A1.66 billion) for the first half of the financial year, up 230 per cent and an underlying profit of $US1.267 billion ($1.8 billion), up 300 per cent.

Free cash flow was $US1.708 billion ($A2.4 billion), up 230 per cent.

Santos announced an increased share buyback from $US250 million ($A356 million) to $US350 million ($A498 million) and boosted the interim dividend – up 38 per cent at US 7.6 cents (10.8 cents) per share unfranked. The company intends to return US$605m to shareholders.

Santos also announced a final investment decision has been taken to proceed with the Pikka Phase 1 oil project in Alaska.

The results reflect significantly higher oil and liquefied natural gas prices compared to a year earlier due to strong global energy demand as the war in Ukraine disrupts leading producers.

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“Today’s results demonstrate the strength of Santos, with strong diversified cashflows and capacity to provide sustainable shareholder returns, fund new developments and the transition to a lower carbon future,” chief executive Kevin Gallagher said in a statement.

“Demand for our products has remained strong in both Australia and internationally, due to increased demand and shortages of supply from producing nations due global underinvestment in new supply.

“We are seeing these issues play out in the significant shift in global energy policy towards energy security as a key priority. Our critical fuels not only play a key role in the energy security of Australia and Asia, but they also provide affordable and reliable alternatives to switch from higher emitting fuels.”

There was also higher interest in Papua New Guinea LNG following the Oil Search merger, Santos said.

-with AAP

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