The Santos Ltd (ASX: STO) share price has pushed higher on Thursday following the release of its fourth quarter and full year update.
At the time of writing the energy producer's shares are up almost 1% to $6.01.
What was in today's update.
In the fourth quarter Santos achieved record quarterly sales revenue of $1,043 million, up 7% on the third quarter. This strong performance was driven partly by its record quarterly LNG sales revenue of $449 million, up 11% on the previous quarter.
Following this strong end to its financial year, Santos achieved record annual sales revenue of $3,696 million, which is a 19% increase on the prior year.
These strong sales meant that Santos finished the year with cash and cash equivalents of $1.3 billion and total debt of $4.9 billion, which equates to a net debt of $3.6 billion and gearing of approximately 33%.
Santos also revealed strong production numbers during the final quarter. It produced 15.9 mmboe during the quarter, up 6% on the previous quarter. This was driven by the sustained strong performance from its core portfolio and the acquisition of Quadrant Energy.
Managing director and chief executive officer, Kevin Gallagher, appeared to be pleased with the company's performance.
He said: "In 2018, Santos delivered higher production in the onshore business and acquired Quadrant Energy which will provide a significant boost to our production in 2019. Our cash generative asset portfolio set new records for quarterly and annual sales revenues, notwithstanding the divestment of our non-core Asian assets during the year, while our low cost and disciplined operating model enabled more investment in exploration and appraisal to improve ongoing organic resource and reserve replacement."
He also appeared positive on the company's medium to long term prospects. Saying: "Santos is positioned for growth across each of our five core assets and we are targeting production of more than 100 mmboe by 2025, almost double 2018's level."
Should you invest?
I think the transformation of Santos over the last couple of years has been fantastic and made it an attractive option in the energy sector. However, I feel that oil prices will have a big say in whether an investment is successful or not.
If you think oil prices are going higher then Santos could be a great investment along with Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL).
But if you're bearish on oil prices then it might be best to look elsewhere.
