Oz Santos Returns to Profit in 1H2018

Australian oil and gas independent Santos August 23 reported a net profit during January-June (1H2018) compared with a net loss in the same period of previous year.

Santos’ net profit in 1H2018 was $104mn compared with a $506mn net loss a year earlier and the company revived its dividend after more than two years. The turnaround comes a day after the company announced it will acquire 100% of a smaller Australian producer Quadrant Energy for $2.15bn. Underlying profit in 1H2018 rose to $217mn from $109mn from a year ago thanks to higher energy prices.

"These results are despite the loss of production from our PNG operations due to the earthquake  and further emphasise the value of our core asset diversified portfolio,” Santos CEO Kevin Gallagher said. Quadrant acquisition, Gallagher said, will deliver increased ownership and operatorship of low cost, long-life conventional Western Australian natural gas assets.

"The acquisition is materially value accretive for Santos shareholders and advances Santos' aim to be Australia's leading domestic natural gas supplier."

Santos said it will continue to advance major growth projects, with the Barossa development moving into front end engineering design (Feed) in 2Q2018 and good progress being made toward building partner alignment in PNG for three additional trains on the PNG LNG site.

"We are also in discussions regarding a proposal received for Santos to farm-in to the P'nyang field in PNG and are well placed to benefit from third-party access to our foundation PNG LNG infrastructure,” Gallagher said.