Santos eyes US$2-3billion in asset sale

 SANTOS says it is targeting US$2 billion (about K6.84 billion) to US$3 billion (about K10.2 billion) in asset sale proceeds as a means of strengthening its balance sheet this year.

The Australian operator recorded free cash flow of US$1.5 billion (about K5.13 billion) and underlying profit of US$946 million (about K3.23 billion) last year.

Net profit after tax was US$658 million (about K2.25 billion) which included losses on commodity hedging and costs associated with acquisitions and one-off tax adjustments.

The improved results were a result of much higher oil and LNG prices compared to the corresponding period.

Santos said its low-cost operating model delivered a free cash flow breakeven of US$21 (about K72) per barrel in 2021.

The board has resolved to pay a final dividend of US$8.5 (about K29) per share, 70 per cent higher than the previous final dividend.

Managing director and chief executive officer Kevin Gallagher said Santos delivered record production, free cash flow and underlying earnings last year, as strong base business performance positioned the company to benefit from higher commodity prices.

Gallagher said a highlight of the year was the completion of Santos’ merger with Oil Search Ltd.

“The merger delivers increased scale and capacity to drive our disciplined, low-cost operating model and unrivalled growth opportunities over the next decade – all with a vision of becoming a global leader in the energy transition,” he said.

“The financial results we are announcing today (yesterday) include only three weeks of the merged company.

“Had the merger been in place for all of 2021, the combined asset portfolio would have generated more than US$2.3 billion (about K7.8 billion) in free cash flow for the year.”

Statement / The National/Pacific Mining Watch

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