In morning trade the Santos Ltd (ASX: STO) share price is trading lower following the release of its full year update.
At the time of writing the energy producer’s shares are down 0.5% to $8.84.
How did Santos perform in FY 2019?
In the fourth quarter of FY 2019 Santos reported a 5% quarter on quarter decline in production to 18.7 mmboe. This was primarily due to domestic gas customer outages in Western Australia.
Despite this, the company smashed its production records over the full year. Santos reported record annual production of 75.5 mmboe, up 28% on FY 2018’s production. This was at the high end of its guidance range of 74-76 mmboe.
Over the 12 months the energy producer’s sales volumes reached 94.5 mmboe. This led to it reporting record annual sales revenue of over $4 billion, up 10% on the prior corresponding period.
Positively, Santos’ production costs for the 12 months averaged ~$7.25/boe. This was 10% lower than the prior year and at the bottom end of its guidance range.
Another record that Santos broke in FY 2019 was free cash flow. That came in at $1.1 billion over the 12 months.
The company’s managing director and chief executive officer, Kevin Gallagher, appeared very pleased with its performance in FY 2019.
He said: “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.”
Looking ahead, Mr Gallagher sounds confident on its future prospects thanks to its recent acquisition of assets from ConocoPhillips.
“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,” he added.
Thanks to the aforementioned acquisition, Santos is expecting to break more records in FY 2020.
Production is expected in the range of 79-87 mmboe and sales volumes are expected to be 99-107 mmboe.
Unit production costs guidance will be provided next month when it releases its full year results.
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