Santos looking to expand international operations

LAST year was the most successful year in Santos’ history and Australia's third-largest oil company is now positioning itself to play an increasing role as a significant supplier to international energy markets, according to managing director John Ellice-Flint.
Santos looking to expand international operations Santos looking to expand international operations Santos looking to expand international operations Santos looking to expand international operations Santos looking to expand international operations

Santos’ results for the year ended December 31, 2005 included:

• a record $762 million net profit – more than double the previous year;

• sales revenue jumping 64% to a record $2.5 billion;

• annual production climbing 19% to 56.0 million barrels of oil equivalent;

• operating cash flow surging 142% to $1.5 billion; and

• 15% increase in annual dividend to 38c per share.

In the managing director’s review in the company’s annual report released today, Ellice-Flint said he expected that this year Santos would eclipse its previous highest annual production of 57.3 million boe achieved in 2002.

“We came close to that peak in the past year as new developments boosted production to 56 million boe. Mutineer-Exeter (6.5 million boe), John Brookes (1.1 million boe), Minerva (0.7 million boe) made maiden contributions while Santos’ share of Bayu-Undan output lifted from 1.7 to 2.8 million boe,” he said.

“We expect total annual production of oil and gas to top 60 million boe.”

The company has also begun 2006 with a major step into the international energy marketplace by dispatching the first cargo of liquefied natural gas from the Bayu-Undan (Santos 10.6% interest) processing facility in Darwin, Ellice-Flint said.

“Our confidence in Santos becoming a significant LNG exporter is underpinned by growing demand in major markets in South-East Asia and the US,” he said.

“Buyers are also keen to ensure their energy supplies by diversifying their sources.”

Ellice-Flint said the 2005 Caldita gas discovery (Santos 40%) in the Timor Sea, located about 200km from existing infrastructure for the producing Bayu-Undan gas and liquids project could potentially feed a second processing train at the Darwin LNG plant.

With an aggressive 2006 exploration program, more major discoveries could lie ahead.

“Santos’ 2006 exploration program will see us drill a total of 310 wells – almost six wells a week – of which 25 will be wildcat exploration wells focusing on the Cooper Basin, Timor/Bonaparte region, Indonesia, Egypt and the US,” he says.

“The overall goal for our exploration program is to continue to produce the successes that have generated strong petroleum reserve replacement ratios and underpinned our new development activities.”

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