The Santos Ltd (ASX: STO) share price is marching higher in early trade, up 1.6%.
The S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $6.81. Shares are currently changing hands for $6.92.
This comes following the release of Santos' full-year 2022 financial results.
Here are the highlights.
(*Note all figures are in US dollars.)
Santos share price gains amid surging profits
- Record production of 103.2 million barrels of oil equivalent (mmboe), up 12% from 2021
- Record revenue from ordinary activities of $7.8 billion, up 65% year on year
- Net profit increased 221% from 2021 to $2.1 billion
- Earnings before interest, taxes, depreciation, amortisation, and exploration expense (EBITDAX) of $5.6 billion, up 101% from 2021
- Final unfranked dividend of 15.1 US cents per share, up 78%
What else happened during the year?
Other metrics of interest that could be lifting the Santos share price today include the 160% year on year increase in underlying profit, which came in at $2.5 billion.
(Santos notes that this measure excludes the impacts of asset acquisitions, disposals and impairments, as well as items that are subject to significant variability from one period to the next, including the effects of commodity hedging.)
Santos also reported ending the year with a record reserve and resource position of 5 billion boe, with 165 mmboe 2P reserves added in Alaska following the sanction of Pikka Phase 1.
2022 also saw Santos successfully implement its merger with Oil Search, which it said included the realisation of $122 million of annual synergies.
The Barossa gas project faced some delays but is now 55% complete.
And with free cash flow from operations leaping 142% year on year to $3.6 billion, Santos strengthened its balance sheet with $5.6 billion of liquidity at 31 December. Net debt came down by $1.7 billion to end the year at $3.5 billion.
What did management say?
Commenting on the results that look to be boosting the Santos share price today, CEO Kevin Gallagher said:
We have commenced 2023 with a high level of confidence that Santos will execute its strategic plan and deliver sustainable returns to shareholders as a result. Demand for our products is likely to continue to be strong in 2023 and beyond.
What's next?
Looking ahead to what could impact the Santos share price over the coming months, the company offered 2023 production guidance of 89 to 96 mmboe with sales volumes of 90 to 100 mmboe.
Capital expenditure for major projects, including Santos Energy Solutions is forecast to come in at around $1.8 billion. And upstream production costs for 2023 are expected to fall in the range of $7.25 to $7.75/boe.
Santos share price snapshot
As you can see in the chart below, the Santos share price – which doesn't include the dividend payouts – is down just over 2% since this time last year. Longer-term, shares are up 35% over five years.
