Australian gas producer Santos to double production by 2025

Independent gas producer Santos Ltd has announced on Wednesday it plans to nearly double production to 100 million barrels by 2025.


Santos Chief Executive Kevin Gallagher said the company’s growth strategy was progressing well with the recent $2.5 billion acquisition of privately held Quadrant Energy helping to reduce the company’s breakeven oil price.

Mr Gallagher said this also gave the company a leading position in the significant Dorado oil find.

Santos share prices have risen as much as 1.9 % since the news, their highest since 2015.

‘Subject to regulatory approvals, the recently announced acquisition of Quadrant Energy will further reduce our breakeven oil price and deliver operatorship of a high quality portfolio of low-cost, long-life conventional Western Australian natural gas assets.’ Mr Gallagher said.

Since 2016 the company’s growth strategy has delivered a diverse portfolio of long-life natural gas assets, generating free cash flow. As part of their growth strategy they have succeeded as one of Australia’s lowest-cost onshore operations.

“Our strategy has been to establish a disciplined low-cost operating model that delivers strong cash flows through the oil price cycle,” Mr Gallagher said.

The announcement comes after Santos revealed earlier this month it had signed a new long term natural gas supply agreement with Brickworks Limited for its east coast operations through to the end of 2024.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer