Santos expects to book $328mn impairment charge
Australia’s Santos on February 14 announced it expects an impairment charge of about $328mn before tax in its full-year results.
The company expects to book an impairment of approximately $147mn as a result of the Spar/Halyard reserves reduction and other impairment charges of approximately $181mn related to other late-life producing and exploration assets.
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Meanwhile, Santos said its proved plus probable (2P) reserves were a record 1,745mn barrels of oil equivalent (boe) at the end of 2022, an increase of 171mn boe before production. The annual 2P reserves replacement was 166% and the three-year replacement 366%, it said.
The Cooper basin and Queensland saw additions of 9mn boe and 10mn boe 2P reserves, respectively, before production. Reserves were also added in Papua New Guinea, primarily in the operated gas fields.
These reserve additions were partially offset by a 26mn boe 2P reserves reduction in Western Australia, primarily due to earlier-than-expected water ingress at the Spar/Halyard field.
After accounting for the Spar/Halyard reduction and 2022 production, Santos had 841 petajoules of 2P sales gas reserves in Western Australia at the end of 2022, providing coverage for existing contracts. In addition, Santos had 1,400 petajoules of 2C sales gas resource in Western Australia at the end 2022 and 437mn boe of total 2C resource when including liquids.