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Santos profits slide on weak oil and gas prices

South Australia’s biggest company saw its profits fall by US$1 billion in 2023, with revenue dropping too alongside lower oil and LNG prices.

Feb 21, 2024, updated Feb 21, 2024
Photo: Liam Jenkins/InDaily

Photo: Liam Jenkins/InDaily

Santos’ underlying profit for the year ending 31 December was US$1.42 billion (AUD$2.17 billion), down 42 per cent from US$2.5 billion the year prior.

The Adelaide-based company blamed lower oil and gas prices for the drop in profits and revenue, the latter of which was also down by 24 per cent to US$5.9 billion in the full-year period.

However, the company announced a record cash return of US$852 million to shareholders for the full year through a final dividend of US 17.5 cents per share unfranked, bringing total dividends declared for the 12 months to US 26.2 cents per share.

“Today’s results demonstrate the capability of Santos to generate strong cash flow, develop major projects and deliver sustainable shareholder returns,” Santos managing director and CEO Kevin Gallagher said.

Alongside the results, the company provided an update on ongoing projects including the $5 billion Barossa Gas Project which was subject to Federal Court proceedings last year over claims it interfered with cultural heritage in the Timor Sea.

Santos successfully saw that case dismissed, and today said the Barossa Gas Project is 67 per cent complete with first gas expected in the third quarter of 2025.

“The Barossa well has been completed and the second well is under way,” Santos said.

“Initial flow rates are in line with expectations and carbon dioxide content is at the low end of the expected range.”

Though oil and gas prices are down, the company said demand for its products remained “strong”.

“We are expanding our LNG portfolio by delivering on Barossa with first gas expected in the third quarter next year,” Santos said.

“We are also progressing Papua LNG towards a final investment decision.

“These projects will transform Santos and provide long-term value for shareholders.”

The company’s full-year results come after Santos and Perth-based Woodside pulled the plug on merger talks that would have created an $86 billion energy giant.

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