Santos Ltd. has reported $1.4 billion in sales revenue for the first quarter of 2024 with 23.2 million barrels of oil equivalent (MMboe) sold.
Both figures mark a fall from the prior quarter and the same three-month period a year ago, according to results released by the Australian exploration and production company. Santos’ sales volumes for liquefied natural gas (LNG) in the opening quarter of 2024 totaled 1.4 million tons. Sales volumes for crude oil stood at 1.5 million barrels.
While volumes decreased, Santos saw a quarter-on-quarter rise in its average selling price for LNG from $12.33 per million British thermal unit (MMBtu) in the October–December 2023 period to $12.68 per MMBtu in the January–March 2024 period. Santos’ average realized price for liquefied petroleum gas also rose sequentially. Prices for both products decreased by year-ago comparison.
Santos’ average realized oil price increased both by prior-quarter and prior-year comparisons to $89.14 a barrel.
Upstream, Santos produced 21.8 MMboe, down from the prior quarter and the same quarter 2023. Santos cited “severe weather events and planned maintenance activities”.
Santos generated $692 million in free cash flow from operations. Capital expenditure totaled $759 million. Santos did not disclose its net profit and other financial metrics.
“The first quarter brought strong free cash flow which provides a solid foundation for the year ahead”, managing director and chief executive Kevin Gallagher said in a statement. “It positions us well to fund shareholder returns, backfill and sustain our existing business, complete our major projects and grow our Santos Energy Solutions business”.
The Barossa Gas Project, which will supply an existing liquefaction facility in Australia’s Northern Territory, reached 70.6 percent completion as of March, according to Santos. The component floating production, storage and offloading unit was on track for delivery from Singapore in the first quarter of 2025, Santos said.
In the United States, the Pikka oil field in Alaska state reached 47 percent completion, Santos said. The first phase targets the Nanushuk 2/3 reservoirs, which contain proven and probable reserves of 397 million barrels gross (165 million barrels share for Santos). Discovered 2013, Pikka is expected to start production 2026.
“Barossa and Pikka are world-class projects that will be transformative for Santos and set the company up with long-term, stable cash flows for the next 10-15 years at least”, said Gallagher.
Meanwhile, Santos’ Moomba Carbon Capture and Storage (CCS) Project in South Australia was 85 percent complete as of the end of the quarter. Commissioning activities have started, Santos said.
“Our Moomba CCS Project is on track for first injection of CO2 [carbon dioxide] this year and will be a game-changer for decarbonizing our own operations as well as opening opportunities for Santos to provide competitive decarbonization services to customers and third parties, particularly in hard-to-abate sectors such as steel, cement and aviation”, Gallagher said.
The chief executive added, “Our focus for 2024 is continuing to drive the disciplined low-cost operating model across the business and the execution of Barossa, Pikka and Moomba CCS projects whilst maintaining a strong balance sheet”.
Santos earlier announced an agreement with Liberty Primary Metals Australia Pty. Ltd. “to enter into discussions for gas supply combined with carbon capture and storage opportunities to support the green steel transformation of the Whyalla steelworks”.
The memorandum of understanding includes a pre-feasibility study of “CCS opportunities aimed at abating emissions from the Whyalla iron and steel works”, Santos said at the time in a press release February 25.
To contact the author, email jov.onsat@rigzone.com
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