Santos has today released its First Quarter Activities Report for the period ending 31 March 2017.
Balance sheet strengthened
Growth in PNG and Northern Australia
Santos Managing Director and Chief Executive Officer Kevin Gallagher said today’s release of the first quarter results was further evidence the Santos turnaround strategy was delivering positive results.
“Our costs have again been reduced, we have improved our free cash flow position and our net debt has been lowered,” Mr Gallagher said.
“Our 2017 forecast free cash flow breakeven now stands at US$34 per barrel.1 This is a significant reduction from the
$47 per barrel mark at the beginning of 2016.
“Strong free cash flow combined with cash proceeds from asset sales and the Share Purchase Plan enabled us to reduce net debt by US$380 million in the first quarter. This is strong progress towards our target of a US$1.5 billion reduction in net debt by the end of 2019. We will continue to prioritise free cash flow for debt reduction.
“GLNG produced higher LNG volumes in the first quarter, as strong upstream field performance delivered higher volumes of equity gas to the LNG plant,” Mr Gallagher said.
Total first quarter production of 14.8 mmboe was down slightly on the previous quarter, primarily due to sale of the Victorian, Mereenie and Stag assets, partially offset by higher GLNG equity production. Total sales volumes of 18.6 mmboe were lower due to asset sales, lower third party volumes and the timing of liftings.
All guidance for 2017 is maintained.
1 Free cash flow breakeven is the average annual oil price in 2017 at which cash flows from operating activities equals cash flows from investing activities. Forecast methodology uses corporate assumptions. Excludes one-off restructuring and redundancy costs and asset divestitures.