Santos has released its first quarter report for 2023, announcing a substantial sales revenue of US$1.6 billion for the quarter.
According to Santos, the first quarter’s output of 22.2 mmboe was lower than the previous quarter, owing mostly to lower domestic gas volumes in Western Australia, which were supplemented by prolonged production from the Bayu-Undan field.
Santos also reported that the free cash flow was roughly $720 million in the first quarter.
With regards to shareholder returns and delivering on its strategy, Santos completed US$466 million of the announced US$700 million on-market share buyback at the end of March.
The Barossa project is 56% complete; however, drilling operations have been halted pending the re-submission and approval of the environmental plan. Drilling efforts could resume before the end of the year.
Meanwhile, Pikka Phase 1 is preparing to drill in the second quarter of 2023.
FEED entry on the integrated Papua LNG project in March 2023, with the first production anticipated by the end of 2027 or early 2028.
The regulator accepted the Dorado Offshore Project Proposal in February 2023 to support development. Santos continues refining an integrated development model, emphasising integrating the Pavo discovery and phase 2 via Varanus Island.
According to Santos, the impact of the planned Safeguard Mechanism amendments remains unclear as the rules have yet to be finalised. Santos said it is still working with the Australian Government on the proposed changes.
The Moomba CCS project is 60% complete, with the first injection scheduled for early 2024.
The first 0.25 tonnes per day Direct Air Capture unit, complete with field trials in the Cooper Basin, is scheduled to begin in the first half of 2023.
FEED work scopes for the Bayu-Undan CCS project have been completed, including the design of the offshore platform topsides CCS equipment.
Santos Managing Director and Chief Executive Officer Kevin Gallagher stated that the company’s diversified portfolio produced another good quarter of production and cash flow creation, illustrating the robustness of its disciplined operating model.
“Our Santos Energy Solutions business continues to work on building new revenue sources through decarbonisation projects. The Moomba CCS project, which will be one of the biggest in the world, is 60 percent complete and on track for first injection of CO2 next year. We have also established a partnership with Osaka Gas to investigate the feasibility of carbon neutral synthetic e-methane from green hydrogen in the Cooper Basin,” Gallagher said.
“Despite the uncertain external environment Santos continues to perform strongly against the backdrop of regulatory and economic uncertainty. The disciplined operating model we have in place positions us to deliver on our strategy to backfill and sustain our infrastructure, decarbonise and develop future clean fuels,” Gallagher added.
