Santos Delivers Record Production, Revenue, and Profit

by PNG Business News - April 12, 2023

Photo: Kevin Gallagher. Credit: Roy Vandervegt

Santos achieved a new production, revenue, and underlying profit record in the last financial year. According to Kevin Gallagher, Managing Director, and CEO, these results were driven by strong customer demand and higher commodity prices. During the recent annual general meeting, Gallagher emphasized that 2022 was the first full-year period after the merger of Santos and Oil Search. He added that production increased by 12% to 103.2 million barrels of oil equivalent (BOE), and sales revenue increased by 65% to US$7.8 billion (about K17.8 billion). Additionally, a record US$3.6 billion (about K8.23 billion) of free cash flow, up by 142%, was generated due to the strong operational performance and higher prices.

Chairman Keith Spence stated that the company would continue to focus on value accretion and delivering sustainable returns to shareholders over the long term. Despite the company's strong performance and new strategy, the share price has yet to reflect it. Spence highlighted that the balance sheet is stronger, with gearing reduced to 18.9% in 2022. As a result, the company declared the return of US$1.5 billion (about K3.4 billion) to shareholders. This includes a 78% increase in the final dividend to 15.1 cents per share unfranked, bringing the total dividends declared for the year to 22.7 cents per share (up 62%). Moreover, an on-market share buyback of US$700 million (K1.6 billion) will also be implemented.

"The board has responded to shareholder feedback and is targeting shareholder returns of at least a 40% payout of free cash flow generated from operations each year," said Spence. This announcement reflects Santos' commitment to creating long-term value for its shareholders while maintaining its sustainable growth strategy.

In Gallagher's words, "Santos' record performance last year was a testament to the company's operational excellence and the strategic value of the merger with Oil Search."



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