The Santos Ltd (ASX: STO) share price is marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $8.01. In morning trade on Thursday, shares are changing hands for $8.06 apiece, up 0.6%.
For some context, the ASX 200 is down 0.2% at this same time.
This comes following the release of Santos' quarterly update for the three months ending 30 June.
Read on for the highlights.
Santos share price higher on production lift
Investors are bidding up the Santos share price today after the company reported quarterly sales revenue of US$1.3 billion. That's roughly equivalent to revenue in the prior corresponding quarter.
Production hit 22.2 million barrels of oil equivalent (mmboe), up 2% quarter on quarter.
Gearing was reported at 19.9%, excluding operating leases. Including those leases, gearing stands at 23.5%.
And free cash flow from operations came in at US$380 million. Santos said it expects its half-year free cash flow to reach roughly US$1.06 billion.
Commenting on the key metric helping lift the Santos share price today, CEO Kevin Gallagher said, "First half cash flow of almost US$1.1 billion positions us well to fund shareholder returns, backfill and sustain our existing business, and grow our Santos Energy Solutions business."
The quarter also saw Santos execute a binding long-term LNG supply and purchase agreement with Hokkaido Gas to provide portfolio LNG of some 400,000 tonnes per year for 10 years, commencing in 2027.
On the major project front, the Barossa Gas Project is 775 complete; the Pikka Project is 56.2% complete; and the Moomba phase one Carbon Capture and Storage (CCS) Project is 92% complete.
"Our major projects continue to deliver to plan," Gallagher said.
He added:
I am very pleased that both the Barossa pipelaying activities and the installation of the modules onto the FPSO in Singapore are now complete and other activities are on track for offshore commissioning to commence in the first quarter of 2025. The Pikka project has had a strong first winter season with the team delivering significant progress on the North Slope, with some pleasing well results…
We can now see line of sight to our major projects progressively coming online, putting us in a strong position to deliver sustainable, competitive shareholder returns over the long term.
What's next?
Looking at what could impact the Santos share price in the months ahead, the company is forecasting 2024 production of 84 mmboe to 80 mmboe with sales volumes of 87 mmboe to 93 mmboe.
Total capital expenditure guidance (including major project and decommissioning) is around $2.85 billion for the year. Unit production costs are expected to be in the range of $7.45 to $7.95 per barrel of oil equivalent (boe).
"Our focus for 2024 is on continuing to drive the disciplined low-cost operating model across the business and the execution of the Moomba phase one CCS project, Barossa Gas Project, and Pikka Project, whilst maintaining a strong balance sheet," Gallagher said.
Santos will report its full half-year results on 21 August.
With today's intraday moves factored in, the Santos share price is up 7% over 12 months. The ASX 200 energy stock trades on a 3.5% unfranked dividend yield.
