Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Santos shares boosted by improved outlook

Christian Edwards  |  20 Jul 2017Text size  Decrease  Increase  |  

Page 1 of 1

SYDNEY - [AAP] Santos (ASX: STO) has lifted its full year production and sales guidance after higher liquefied natural gas prices contributed to an improved quarterly performance.

The part-owner of the Gladstone LNG project achieved total sales growth of 12 per cent in three months to June to $US769 million, which Royal Bank of Canada analyst Ben Wilson said was above RBC's forecast of $US692 million.

Improved sales revenue and volumes were primarily due to higher LNG prices and the timing of deliveries, Santos said in its quarterly report.

Santos now expects to produce between 57 and 60 million barrels of oil equivalent (mmboe) in 2017, an improvement on its previous guidance of 55 to 60 mmboe.

Full year sales are expected to be between 75 and 80 mmboe, up from its previous target of range of 73 to 80 mmboe.

The improved forecasts sent Santos shares higher, up 22.5 cents, or 7.45 per cent, to $3.245 by 1205 AEST.

Santos has also lowered its forecasts for upstream production costs, to between $US8 and $US8.25 per barrel of oil equivalent (boe), down from its previous forecast of between $US8 and $US8.50.

Mr Wilson said the strong performance of the Gladstone LNG project as well as a reduction in costs and debt allowed that improved forecast.

"The company continues to make progress on the reduction in free cash with cash conversion coming in ahead of our forecasts," he said.

Santos managing director and chief executive Kevin Gallagher said more efficient, lower cost operations had enabled Santos to increase drilling activity in both the Cooper Basin and at its Gladstone LNG operations.

"Our forecast free cash flow breakeven for 2017 now sits at US$33 per barrel, well below the US$47 per barrel at the beginning of 2016," he said.

Santos' net debt of US$2.9 billion is down from $US3.5 billion 12 months ago.


AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.