STOSF - Santos' Q1 Oil Production Up Despite Cyclone
Australian energy producer Santos (ASX:STO,OTC Pink:STOSF) has released its Q1 2019 results, highlighting a 33 percent production increase compared to the same period in 2018.
The oil producer credits the positive performance to sustained strength in its asset performance and the acquisition of Quadrant Energy.
Output for Q1 2019 hit 18.4 million barrels of oil equivalent.
The company also generated record levels of free cash flow, hitting AU$327 million for the quarter. A new sales record was set with revenues increasing 28 percent to AU$1.02 billion, as well as a 21 percent increase in sales volumes.
“Santos’ first quarter delivered record production volumes and a record free cash flow for a single quarter,” Managing Director and CEO Kevin Gallagher said in a press release.
“Our brownfield growth strategy and disciplined operating model continue to drive strong free cash flow to support our growth ambitions across our five long-life natural gas assets. This disciplined approach to capital allocation has now delivered positive free cash flow for twelve consecutive quarters.”
Despite the double-digit increase, production for Santos was impacted when Cyclone Veronica hit Western Australia in late March and by outages in the Cooper Basin.
While those issues kept Santos from operating at full capacity for a portion of the quarter, 26 wells were drilled in the Cooper Basin and 87 in the GLNG region, for success rates of 85 and 100 percent, respectively.
A significant gas resource was also discovered by Santos in the Corvus-2 appraisal well offshore of Western Australia.
“In the second quarter, we look forward to continued drilling success, including commencing appraisal of the exciting Dorado oil discovery offshore Western Australia,” said Gallagher.
Shares of Santos were up 2.89 percent on Wednesday (April 17), trading at AU$7.11.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.