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Santos share price up as it flags record production over “strong” Q3

The Santos Ltd (ASX: STO) share price is marginally higher this morning after the LNG producer posted record quarterly production of 19.8 million barrels of oil equivalent (mmboe) that translated into sales revenue of $1,030 million.

Santos reports on a calendar year basis with total production up 7% on the prior quarter and sales volumes of 25.2 mmboe landing 25% higher than the prior corresponding quarter.

In total it posted $214 million in free cash flow over the quarter to take free cash flow to $852 million for the 9 months to September 30, 2019.

Santos also announced the US$1.39 billion acquisition of ConocoPhillips’ natural gas fields in northern Australia in a deal that will  be funded by existing cash resources and new bank debt. 

“This value accretive acquisition will also further reduce our free cash flow breakeven oil price and strengthen our offshore operating and development expertise to drive growth across northern and Western Australia where we have a significant existing resource position,” CEO, Kevin Gallagher, reported.

Santos is sticking to guidance for total LNG production between 90-97 mmboe over 2019. Capital expenditure is forecast to land between $950 million to $1,050 million.

Other LNG producers enjoying robust energy prices recently include Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL)

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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