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Barossa Gas Project: Learn more

Santos today lifted its 2025 production target further to 120 million barrels of oil equivalent (mmboe), more than double 2018’s output.

The new target, up from 100 mmboe set in 2018, represents a cumulative annual growth rate in production of over 8% to 2025.

Speaking at the company’s Investor Day in Sydney, Santos Managing Director and Chief Executive Officer Kevin Gallagher said the successful execution of Santos’ Transform-Build-Grow strategy since 2016 has the company positioned for disciplined growth and sustainable shareholder returns.

“Our strategy has been to establish a disciplined low-cost operating model that delivers strong cash flows through the oil price cycle. Our 2019 forecast free cash flow breakeven oil price is now ~US$29 per barrel,” Mr Gallagher said.

“The recently announced acquisition of ConocoPhillips’ interests in northern Australia and Timor-Leste1 will further reduce our breakeven oil price and deliver operating interests in long-life, low-cost conventional natural gas assets and strategic LNG infrastructure.”

“We are now positioned for disciplined growth leveraging existing infrastructure in all five of our core assets, which we believe will deliver 120 mmboe by 2025.”

This disciplined growth portfolio includes:

  • Barossa LNG – targeting FID around the end of Q1 2020
  • Dorado liquids – targeting FEED-entry Q2 2020
  • PNG LNG expansion – targeting FEED-entry in 2020
  • GLNG ramp-up to ~6.2 mtpa sales from 2020
  • Cooper Basin production growth

Mr Gallagher said Santos was well positioned to fund growth out of operating cash flow and debt while maintaining gearing levels within the company’s target range through the major growth phase, with rapid de-gearing expected thereafter.

“Natural gas is forecast to supply a quarter of the world’s total energy demand by 2040. Through our Energy Solutions business, we are investing in projects to lower emissions and assessing the significant potential for carbon capture and storage in the Cooper Basin,” Mr Gallagher said.


Santos has narrowed 2019 production guidance to 74-76 mmboe (previous 73-77 mmboe) and sales volumes guidance to 93-95 mmboe (previous 90-97 mmboe).

2019 upstream unit production cost guidance is lowered to $7.25-7.50/boe (previous $7.25-7.75/boe). Capital expenditure is expected to be approximately $1 billion (previous $950 million to $1,050 million) including major growth.

Base businessBase business (excl COP acquisition) (a)COP acquisition (after expected 25% sell-down) (b)Total
Production74-76 mmboe73-80 mmboe6-7 mmboe79-87 mmboe
Sales volumes93-95 mmboe93-100 mmboe6-7 mmboe99-107 mmboe
Capex – Base

Capex – Major growth3
~$950 million

~$50 million
~$950 million

~$500 million
Unit production costs$7.25-7.50/boeTo be provided at 2019 full-year results in February

(a) Completion of the acquisition is expected in the first quarter of 2020 and is subject to third-party consents and regulatory approvals.

(b) Assumes completion of the ConocoPhillips acquisition and expected 25% sell-down to SK E&S both occur on 31 March 2020.

(c) Major growth comprises Barossa in 2019 and Barossa, Dorado and PNG LNG train 3 in 2020. Assumes sell-down of Barossa to Santos’ targeted 40-50% interest range in 2020.

Production in 2020 is expected to increase to between 79-87 mmboe, comprising 73-80 mmboe from the base business (excluding the ConocoPhillips acquisition and expected 25% sell-down to SK E&S) and 6-7 mmboe net from the acquired assets after the sell-down.

Completion of the ConocoPhillips acquisition is expected in the first quarter of 2020, subject to third-party consents and regulatory approvals. At completion of the acquisition and expected 25% sell-down to SK E&S, Santos’ interest in Bayu-Undan and Darwin LNG will be 43.4% (11.5% pre-transactions). Santos’ incremental 31.9% interest would add approximately 6-7 mmboe production in 2020, assuming completion of both transactions occurs on 31 March 2020.

Capital expenditure in 2020 is expected to include approximately $950 million sustaining capex in the base business (including all onshore drilling, asset sustaining capex, exploration and corporate) and approximately $500 million major growth capex for Barossa, Dorado and PNG LNG expansion. Barossa major growth capex assumes sell-down to Santos’ targeted 40-50% interest range.