Santos reports 50% jump in H1 underlying profit
Australian oil and gas explorer Santos on August 17 reported a 50% year/year jump in underlying profit in the six months to June 30 (H1) owing to higher oil prices.
The underlying profit, which excludes one-off items, came in at $317mn in H1, up from $212mn reported last year. The net profit after tax was $354mn compared with a loss of $289mn in the same period last year. The net profit after tax which includes net gains on asset sales and is significantly higher than the corresponding period mainly due to impairments included in the previous half-year result, Santos said.
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The company’s production in H1 was a record 47.3mn barrels of oil equivalent, up 23% yr/yr while sales volume too was highest ever at 53.8mn boe, up 15% yr/yr. "Record 1H21 production volumes were driven by average higher equity in Bayu-Undan, strong upstream performance at GLNG and Western Australia oil and gas," the company said.
Santos is expecting to sign the Oil Search merger deal next month. The company said it is “targeting to execute binding merger implementation deed in September and scheme vote by late November.”
“The proposed merger is a compelling combination of two industry leaders to create an unrivalled regional champion of size and scale with a unique diversified portfolio of long-life, low cost oil and gas assets,” Santos CEO Kevin Gallagher said.
“The merged company would have strong cash generation from a diverse range of assets which provides a strong platform for sustainable growth and continued shareholder returns,” he said. “The merger would also build on our industry-leading approach to ESG through the combination of Santos’ net-zero 2040 pathway, including its sector-leading CCS projects, and Oil Search’s unique social programs in PNG, underpinned by a strong balance sheet to fund the transition to a lower-carbon future.”