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Santos reports $434 million net profit for 2009

Santos today announced a net profit of $434 million after tax for the year ended 31 December 2009. This compares to the $1.7 billion result reported for 2008 which was boosted by a $1.2 billion profit from the sale of a 40% interest in the GLNG® project to PETRONAS.

The 2009 result includes a $180 million net profit after tax from asset sales. This includes the sale of 60% of the Petrel, Tern and Frigate fields to GDF SUEZ announced in August 2009.

Underlying net profit in 2009 of $257 million compares to $548 million in the prior year. Lower product prices impacted the 2009 result, reducing sales revenue by $600 million compared to the previous year.

Results Highlights

  • Average oil price down 33% to A$78.83 per barrel
  • Production 54.4 mmboe, same as 2008
  • Sales 60.1mmboe, up 8%
  • Sales revenue $2,181 million, down 21%
  • Operating cash flow $1,155 million, down 17%
  • Underlying net profit after tax $257 million, compared to $548 million in 2008
  • Net profit after tax $434 million
  • Earnings per share 52.1 cents
  • Strong balance sheet: $2.2 billion of cash
  • Final dividend of 20 cents per share fully franked, unchanged from 2008
  • 2009 dividends declared of 42 cents per share, unchanged from 2008

Production of 54.4 million barrels of oil equivalent (mmboe) was the same as the previous year and in the middle of the company’s guidance range. Strong gas production in Western Australia and Indonesia, combined with new production from Oyong Phase II in Indonesia, offset natural field decline in mature assets.

Sales revenue decreased by 21% to $2.2 billion despite higher sales volumes. Revenue was lower primarily due to lower product prices across the portfolio, partially offset by a lower AUD/USD exchange rate and higher sales volumes.

Cash production costs were $11 million ($0.21/boe) lower than last year. Overall cost of sales was flat year on year despite sales volumes being up 8%, with lower cash costs of production and depletion and depreciation charges offset by higher third party gas purchase costs.

Operating cash flow of $1,155 million was 17% lower than last year primarily due to lower product prices partially offset by lower cash costs and income taxes paid.

Santos Chief Executive Officer David Knox said: “2009 was defined by delivery from the base business and strong progress on our LNG growth strategy. We sanctioned PNG LNG, made significant progress on GLNG® and created our fourth LNG project in Bonaparte LNG.”