Santos has delivered record annual production across its operations in 2019, as well as a lower unit production costs attributed to the effectiveness of the company’s disciplined, cash generative operating model.
The annual production of 75.5 million barrels of oil (mmboe) was a record for Santos, a 28 per cent improvement on the previous year.
Santos also confirmed record annual sales revenues of more than $4 billion (up 10 per cent), which was generated from sales volumes of 94.5 mmboe.
The fourth quarter production of 18.7 mmboe was 5 per cent lower than the prior quarter (19.8 mmboe), primarily due to domestic gas customer outages in Western Australia.
Santos increased production in the Cooper Basin for the second consecutive year, driven by strong operating performance and a record 115 wells drilled, compared with 85 wells in 2018.
Thirty-four wells were spudded during the fourth quarter: 17 development wells, 13 appraisal wells and four near-field exploration wells.
Cooper Basin production increased to 4.1 mmboe in the fourth quarter compared with 4 mmboe in the previous year.
Santos logged higher GLNG sales on the back of enhanced upstream equity gas production, while a record 393 wells were drilled, 29 per cent higher than 2018, and 431 wells were connected (44 per cent higher).
The GLNG target to deliver 6 million tonnes per annum (mtpa) equivalent run-rate was achieved in the month of October, with an annualised sales run-rate, including volumes redirected to the domestic market, exceeding 6 mtpa annualised.
Santos is now expecting an annualised sales run-rate of 6.2 mtpa at GLNG this year. Its gross GLNG-operated upstream sales gas production increased to 622 terajoules a day (TJ/day) at the end of the quarter, supported by continued steady growth from Roma and Arcadia.
The Adelaide-based company continued to steadily increase production at Roma in Queensland, which resulted in gross daily production lifting to 137 TJ/day at the end of the quarter.
Production from the Arcadia field grew to 15 TJ/d by the end of the quarter, supported by a growing contribution from the new Arcadia Valley wells, Santos reported.
Santos reported a record free cash flow of over $1.1 billion in 2019, however production costs of $7.25/boe were 10 per cent lower than the prior year, and at the bottom end of guidance.
During the quarter, Santos announced the acquisition of ConocoPhillips’ business in northern Australia and Timor-Leste, with operating interests in Darwin LNG, Bayu-Undan, Barossa and Poseidon for $1.39 billion plus a $75 million contingent payment subject to an investment decision on Barossa.
The acquisition is on track for completion in the first quarter of 2020, subject to approvals.