You are using an outdated browser. Please upgrade your browser to improve your experience.
Skip to content
Barossa Gas Project: Learn more

Record sales revenue and strong free cash flow

  • Strong base business performance and improved commodity prices delivered record quarterly sales revenue of US$1.1 billion and record first half sales revenue of over US$2 billion
  • Second quarter production of 22.5 mmboe was nine per cent lower than the first quarter, primarily due to completion of the 25 per cent sell down in Bayu-Undan and Darwin LNG to SK E&S on 30 April 2021, partially offset by stronger gas production in Western Australia and Queensland
  • First half production of 47.3 mmboe was 23 per cent above the corresponding period and sees 2021 guidance narrowed to the upper part of the range
  • Continued growth in GLNG equity gas production from the Roma and Arcadia fields supports annualised LNG production above 6.2 mtpa for 2021
  • US$270 million in free cash flow in the second quarter, bringing first half free cash flow to US$572 million

Key growth milestones achieved and balance sheet strengthened

  • Initiated major workstreams for the Barossa gas and condensate project, including cutting first steel for the FPSO turret, commencing manufacturing of subsea and export flowlines, and assembly of subsea trees
  • Entered FEED phase for the Dorado integrated oil and gas project
  • Issued US$1 billion 10-year senior unsecured fixed rate bond in the US 144A/Reg S market
  • Strong free cash flows reduced net debt (including leases) to US$3.4 billion and gearing to 32 per cent at the end of the quarter

Energy transition to cleaner fuels

  • Signed MOU with Eni to cooperate on opportunities in northern Australia and Timor-Leste, including re-purposing Bayu-Undan into a carbon capture and storage (CCS) hub for projects in the region with a potential capacity of ~10 mtpa of CO2
  • Awarded A$15 million in funding for the Moomba CCS project from the Australian Government’s Carbon Capture Use and Storage Development Fund. The 1.7 mtpa Moomba CCS project is FID-ready, subject to confirmation of eligibility for Australian Carbon Credit Units

Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos had delivered another strong quarter of production, sales volumes and revenues, as the business benefited from stronger demand and higher prices. Domestic gas sales volumes were up 7% as we responded to higher customer demand.

“Our disciplined, low-cost operating model continues to drive strong performance with US$572 million of free cash flow generated in the first half, and the business remains on track to deliver a free cash flow breakeven oil price of US$25 per barrel this year. At current oil prices, Santos should generate over US$1.1 billion in free cash flow in 2021.

“Consistent with our 2021 strategic priorities, after taking the FID on Barossa in March, we completed the sell-downs in Bayu-Undan and Darwin LNG, and have now commenced all key workstreams on Barossa as well as entering FEED for the Dorado project. As I have always said, we will remain disciplined and cost-focused during this next phase of growth. Despite cost challenges across the industry, I am pleased that our continued focus on costs sees a lowering of our upstream production cost guidance.

“The Moomba CCS project is FID-ready, and we are actively exploring CCS opportunities at Bayu-Undan and the production of zero-emissions hydrogen at Moomba. These projects provide a competitive advantage as we seek to decarbonise our oil and gas assets on the path to net-zero emissions by 2040,” Mr Gallagher said.