Today, leading Australian oil and gas exploration and production company Santos Ltd [ASX:STO] released its results for the first quarter ending 31 December 2022, hitting records across revenue, production, and cash flow.
Santos says it has delivered US$1.9 billion in sales revenue for the fourth quarter, which adds up to US$7.7 billion for the entirety of 2022 — this is a 65% improvement on 2021.
Shareholders for the STO stock haven’t been overly impressed, with shares dropping more than 2% today:
Source: TradingView
The fourth quarter: Santos run down
Major oil and gas explorer Santos provided results for the last quarter of 2022. These were the highlights:
- Sale revenue came to US$1.9 billion, creating the full-year total of 2022 sales revenue to a new record, US$7.8 billion, a 65% increase on full-year 2021
- The company also reported a new record for annual free cash flow of US$3.6 billion, which was measured as more than double 2021’s numbers
- Production was lower quarter-on quarter, however, the company delivered 25.6 mmboe (million barrels of oil equivalent)
- There was a reduction in annual mmboe, dropping from the record production count of 105.4 million mmboe to 103.2 mmboe
- Free cash flow of US$930 million in the quarter was said to reduce gearing by 18.7%
Santo said its lower mmboe delivery was mostly due to a reduction in domestic gas volumes at the company’s John Brookes conventional gas field, located in Northwest Western Australia, which came as a result of unplanned maintenance arising at the site:
Source: STO
The features behind the numbers
In December, Santos announced a capital management framework, which included a further US$350 million increase on-market share buyback to up to US$700 million.
Kumul Petroleum has offered a binding conditional offer for a 5% interest in PNG LNG for US$1.4 billion, which includes a share of project finance debt until April.
The company’s Barossa Project is now 55% complete, on hold while the company awaits a new drilling activity environment plan.
The Pikka Phase 1 Project is on schedule, and the Moomba CCS Project is 40% complete with both schedule and budget tracking to plan.
As for its Cooper Basin works, STO plans to trial direct air capture technology in the first half of 2023.
The company says that it’s on track to deliver toward upper end of oil synergy guidance, with US$122 million in sustaining annual synergies achieved, the high end of the $110–125 million guidance range.
An incoming boom for commodities
Our resources expert and trained geologist, James Cooper, thinks the Australian resources sector is set to enter a new commodities boom brought on by the ‘Age of Scarcity’.
Similar patterns that occurred 20 years ago are happening again.
James is convinced ‘the gears are in motion for another multi-year boom in commodities’.
A boom where Australia (and ASX stocks) stands to benefit…
The next big mining boom is predicted to happen in the next few years.
You can access a recent report by James on exactly that topic AND access an exclusive video on his personalised ‘attack plan’ right here.
If that isn’t enough to sate your curiosity, we can also share with you a recent interview with James and Greg with Ausbiz at the end of last year.
Regards,
Mahlia Stewart,
For The Daily Reckoning Australia
