Santos managing director and CEO Kevin Gallagher reports that the company has delivered record annual production and revenues in 2019, and lower unit production costs, demonstrating the effectiveness of its disciplined, cash generative operating model.

“The year was highlighted by highest ever free cash flow of more than $1.1 billion, record onshore drilling performance, lower unit production costs and significant progress on our diversified portfolio of growth projects,” Mr Gallagher said.

“The acquisition of ConocoPhillips’ natural gas assets in northern Australia and Timor-Leste announced in October is fully aligned with our growth strategy to build on existing infrastructure positions and delivers operatorship and control of strategic LNG infrastructure at Darwin.”

“Also in the Northern Territory, better than expected gas flow rates from the ongoing Tanumbirini-1 vertical well test are very encouraging and an important step in Santos’ appraisal of the significant resource potential of the McArthur Basin.”

“Natural gas is forecast to supply a quarter of the world’s total energy demand by 2040 and Santos, with its portfolio of long-life natural gas assets, is well positioned to benefit as we seek to deliver 120 mmboe of production by 2025.”

“We are also investing in projects to lower emissions and assessing the significant potential for carbon capture and storage in the Cooper Basin,” Mr Gallagher said.

Santos’ heavy sweet crudes in Western Australia continue to receive strong premiums to industry benchmarks, with a Pyrenees March 2020 lifting sold at a premium of over US$30/bbl to Dated Brent.

The Ningaloo Vision FPSO (Van Gogh and associated oil fields) is expected to commence planned shipyard maintenance in April 2020. Planning is progressing for the Van Gogh infill phase 2 project with three dual lateral wells targeting undrained parts of the field. First oil is targeted for late 2021.

Meanwhile the successful completion of appraisal of the Dorado field has de-risked development options with the project progressing towards a FEED-entry decision in the second quarter of 2020. The preferred concept is an FPSO and wellhead platform development, incorporating an initial phase of oil and condensate development followed by a future phase of gas export.