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Barossa Gas Project: Learn more

Santos has today released its Third Quarter Activities Report.

  • Net debt reduced to US$2.8 billion at the end of the quarter, down from US$3.5 billion at the end of 2016
  • Euro 1 billion Subordinated Notes redeemed and replaced by US$800 million 10-year Reg-S bond, resulting in significant annual interest cost savings of approximately US$40 million per annum from 2017 levels
  • 2017 production guidance upgraded to 58-60 mmboe
  • Sales guidance upgraded to 79-82 mmboe
  • PNG LNG operated at an annualised rate of 8.6 mtpa for the quarter, the highest quarterly rate since start-up
  • Santos announced new arrangements for the supply of more than 125 petajoules of gas into the south-east domestic market over 2017-20

Santos Managing Director and Chief Executive Officer Kevin Gallagher said: “The company’s third quarter results continue to highlight the value of our disciplined operating model in delivering a low-cost, reliable and high performance business that can generate significant free cash flow in the current oil price environment.”

“Compared to the end of 2016, our net debt position is US$700 million lower at US$2.8 billion and our forecast free cash flow breakeven for 2017 sits at US$33 per barrel1, well below the US$47 per barrel at the beginning of 2016.”

Production was up 2% compared to the previous quarter, driven by a 4% increase from the five core assets, primarily due to higher production from the Cooper Basin, Queensland, PNG and WA Gas assets. Sales volumes were in-line with the previous quarter while sales revenues were up 3% to US$793 million, primarily due to higher LNG, condensate and LPG prices. As a result of this continued strong operating performance, Santos has upgraded its production and sales volume guidance for 2017 to 58-60 mmboe and 79-82 mmboe, respectively.

Mr Gallagher said drilling activity was increased in both the Cooper Basin and GLNG, with 16 Cooper and 53 GLNG wells drilled in the quarter. This increase in activity is a result of the significant improvements in the drill, complete and connect upstream operations unit cost performance over the last 18 months.

Santos also announced during the quarter its role in the supply of more than 125 petajoules of gas into in the south-east domestic market over the coming years.

“As an Australian company, we understand the importance of reliable and affordable energy for Australian businesses and households, and are committed to playing our role in supplying the domestic market,” Mr Gallagher said.


1 Free cash flow breakeven is the average annual oil price in 2017 at which cash flows from operating activities (including hedging) equals cash flows from investing activities. Forecast methodology uses corporate assumptions. Excludes one-off restructuring and redundancy costs and asset divestitures.