Strong cash flow from operations, record half-year dividend, strong project delivery
Summary
- Strong free cash flow from operations[1] US$1.1 billion (down 5%)
- Record interim dividend of US$422 million (49% increase). US13 cents per share unfranked
- Stable production of 44 million barrels of oil equivalent (down 2%)
- Robust sales revenue of US$2.7 billion (down 9%)
- Strong delivery of major projects:
- Moomba CCS in final stages of commissioning
- Barossa nearing 80% complete, on track for Q3 2025
- Pikka phase one nearing 60% complete, first oil expected H1 2026
- 2024 guidance remains unchanged
Santos today announced its half-year results for 2024, reporting sales revenue of US$2.711 billion, EBITDAX of US$1.846 billion, underlying profit of US$654 million, strong free cash flow from operations of US$1.068 billion and a record interim dividend of US13.0 cents per share (unfranked).
Managing Director and Chief Executive Officer Kevin Gallagher said Santos has delivered strong cash returns from its operating business as a result of its high-performance culture, disciplined low-cost operating model and consistently prioritising safe and reliable operations.
“Today’s results demonstrate the capability of Santos to generate strong cash flow from operations, deliver significant progress on major projects and deliver competitive, reliable shareholder returns. The disciplined low-cost operating model underpins our business, and we continue to manage our cost base to be resilient through all scenarios and price cycles. We remain focused on delivering our major growth projects with Moomba carbon capture and storage (CCS) phase one in the final stages of commissioning, Barossa is on schedule to come online within the next year and Pikka in 1H 2026.
“Our base business continues to deliver record reliability in PNG, the Angore wells are on track to come online later this year, Queensland coal seam gas is achieving record production rates, and in WA we have safely and efficiently delivered a significant decommissioning program in the first half. The base business provides the foundation for reliable production and cash flows to support returns to our shareholders in accordance with our capital management framework,” Mr Gallagher said.
“Phase one of the Moomba CCS project is in advanced commissioning with the pipeline being pressured up and CO2 to be introduced into the system imminently. The project remains on track for first injection and ramp up to full capacity this year. Phase one of Moomba CCS will be one of the lowest-cost CCS projects in the world and have capacity to permanently store up to 1.7 million tonnes of carbon dioxide annually, making Moomba CCS a significant part of Australia’s journey to net-zero emissions.”
The Barossa Gas Project is nearing 80 per cent complete with first gas expected in the third quarter of 2025.
- The Gas Export Pipeline that will deliver gas from the field to Darwin LNG is now complete.
- The third Barossa well has been successfully drilled and completed with better-than-expected reservoir results.
- The Floating Production, Storage and Offtake vessel is on track to head to Australia in the first quarter of 2025.
Mr Gallagher said, “We’re excited with our progress and the outlook at Barossa with initial results from the third well showing excellent reservoir quality and thickness.
“At full production rates, Barossa is expected to add around 1.8 Mtpa to Santos’ expanding LNG portfolio.
“Phase one of the Pikka Project is almost 60 per cent complete and first oil is expected in H1 2026. The drilling program is now on to the eleventh well. Six wells have been stimulated and flowed back with encouraging results in line with prognosis. Pikka is a low carbon-intensity project that will be net-zero scope one and two emissions from first production.
“Santos continues to deliver on its strategy to backfill and sustain existing infrastructure by unlocking our adjacent large-scale upstream resource base, decarbonising our operations through projects such as Moomba CCS and electrification, and developing low-carbon fuels such as e-methane and e-LNG as market demand evolves,” Mr Gallagher said.
Guidance for 2024 remains unchanged.
Live webcast
A live webcast for analysts and investors will be held today at 11:00 AEDT.
To access the live webcast, register on Santos’ website at www.santos.com.
[1] EBITDAX (earnings before interest, tax, depreciation, depletion, exploration, evaluation and impairment), underlying profit and free cash flow (operating cash flows less investing cash flows net of acquisitions and disposals and major growth capital expenditure, less lease liability payments) are non-IFRS measures that are presented to provide an understanding of the performance of Santos’ operations. Underlying profit excludes the impacts of costs associated with asset acquisitions, disposals and impairments, hedging as well as items that are subject to significant variability from one period to the next. The non-IFRS financial information is unaudited however the numbers have been extracted from the financial statements which have been subject to review by the auditor. A reconciliation between net profit after tax and underlying profit is provided in the Appendix of the 2024 half-year results presentation released to ASX on 21 August 2024.
