PERTH (miningweekly.com) – Oil and gas major Santos has reported record underlying earnings for the full year ended December, with underlying profits increasing by 160% to $2.46-billion.

Net profits after tax for the year were up by 221% to $2.1-billion while earnings before interest, taxes, depreciation and amortisation were up 101% to $5.6-billion.

The ASX-listed company said on Wednesday that the results reflected significantly higher oil and liquefied natural gas (LNG) prices compared to the corresponding period owing to stronger global energy demand combined with a higher interest in Papua New Guinea LNG following the Oil Search merger.

The company reported record production of 103.2-million barrels of oil equivalent, a 12% increase on the previous corresponding period, with sales revenues also up by 65% to a record $7.8-billion, and free cash flows up 142% to a record $3.6-billion.

The reported net profit after tax of $2.1-billion includes the previously announced impairment charges of $224-million after tax, losses on commodity hedging and one-off costs associated with acquisitions and disposals.

MD and CEO Kevin Gallagher said Santos delivered record production, free cash flow and underlying earnings in 2022 as the company benefited from strong customer demand for products, higher commodity prices and disciplined cost management.

“Today’s results demonstrate the strength of Santos, with strong diversified cashflows and capacity to provide sustainable shareholder returns, fund new developments and the transition to a lower carbon future,” Gallagher said.

“Strong free cash flows mean we are in a position to deliver higher shareholder returns through an increase in the final dividend and previously announced increase in the on-market buyback, consistent with our disciplined capital management framework.

“Demand for our products has remained strong in both Australia and internationally, due to increased demand and shortages of supply from producing nations because of global underinvestment in new supply sources.

“Our critical fuels not only play a key role in the energy security of Australia and Asia, but they also provide affordable and reliable alternatives to switch from higher emitting fuels. We are focused on backfill projects to sustain production of these critical fuels in our core assets.

Santos has maintained its major project capital expenditure guidance for 2023, with $85-million to be spent on its energy solutions initiatives, including the Moomba carbon capture and storage and the Cooper Basin electrification projects.

A further $650-million will be spent at the Barossa project, $200-million on the Papua LNG front-end engineering design where a final investment decision (FID) is targeted for late 2023 or early 2024, and a further $480-million on Pikka Phase 1, where an FID was taken in August of last year and where first oil is expected in 2026.

The $2.6-billion project, of which Santos’ share is $1.3-billion, will have a nameplate capacity of 80 000 bbl/d of oil and an expected plateau duration of between six and eight years.l