Santos (STO) SNAPSHOT
Profile: Santos (STO) is an Australian oil and gas company that supplies Australian and Asian customers. It is involved in the exploration, evaluation, development, production and sale of liquefied natural gas (LNG), natural gas, liquefied petroleum gas (LPG), condensate and crude oil. STO core assets are located across the Cooper Basin, Papua New Guinea, WA, northern Australia, NSW & QLD.
History: Santos was established in 1954, with its name at the time an acronym for South Australia Northern Territory Oil Search. STO first made a major gas discovery in the Cooper Basin in 1963. A few years later it made the Moomba 1 discovery in 1966. In 1969, STO commenced gas supplies. In November 2018, STO acquired Quadrant Energy and in October 2019, STO announced the acquisition of ConocoPhillips’ interests in northern Australia for US$1.4bn
Earnings composition: The Cooper Basin segment contributed US$291m (23%) of 1H19 EBITDAX (earnings before interest, tax, impairment, exploration and evaluation, depletion, depreciation and amortisation). QLD & NSW EBITDAX was US$321m (26%). Western Australia was US$314m (25%), Papua New Guinea (PNG) US$283m (22%) and Northern Australia US$50m (4%).
Most recent result – 1H19: EBITDAX increased 43% on the prior corresponding period (pcp) to US$1,260m. Revenue increased 18% on the pcp to US$2.0bn, aided by higher LNG prices, up 11% to 9.97/mmBtu (million British thermal units), and increased production volumes. Production, including increases from the Quadrant Energy acquisition, increased to 37mmboe (million barrels of oil equivalent) from 28mmboe in the pcp (which was impacted by an earthquake in PNG). Underlying NPAT increased 89% on the pcp to US$411m. STO declared a dividend of US$0.06 (AU$0.09) up from US$0.035 (AU$0.05) in the pcp.
Company guidance: STO is targeting 120mmboe of production in 2025, representing an annual production growth rate of 8% p.a. FY19 production guidance is 74-76 mmboe. The growth is expected to be generated across its assets, including final investment decision for Barossa LNG, front end engineering design (FEED) for Dorado liquids, FEED for the PNG LNG expansion, GLNG ramp-up and Cooper Basin production growth.
Important dates: Q4 FY19 results are scheduled for 22 January 2020. FY19 results are scheduled for 20 February 2020. Q1 FY20 results are scheduled for 23 April 2020. Q2 FY20 results are scheduled for 23 July 2020.
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