Australia's No.2 independent gas producer Santos Ltd has posted record quarterly production, boosted by its acquisition of Quadrant Energy assets, a day after it announced an '"exciting" gas discovery in the North West Shelf.
Santos said production for the quarter ended March 31 rose to a record 18.4 million barrels of oil equivalent (mmboe), up from 13.8 mmboe last year.
Revenue came in at $1.02 billion, a rise of 28 per cent and the second-highest quarterly revenue on record, the company said.
Santos acquired Quadrant Energy last year in a $2.15 billion deal, snapping up Quadrant's 80 per cent stake in the promising Dorado oil find.
"In the second quarter, we look forward to continued drilling success, including commencing appraisal of the ... Dorado oil discovery offshore Western Australia", said chief executive Kevin Gallagher.
Revenue growth was slightly held back by lower oil and liquefied natural gas prices, with domestic gas prices also lower due to pricing adjustments on a contract booked in the previous quarter and cyclone-related shutdowns, Santos said.
Net debt as at March 31 was $3.4 billion, down from the prior quarter, while the company also paid off $1.1 billion in gross debt during the quarter.
Santos' net debt rose after the Quadrant buy, which it funded through a combination of cash and new debt.
The company has radically restructured its business in the last two years by divesting non-core Asian assets and implementing sharp cost cuts to slash debt, shielding itself from takeover offers.
Santos has discovered liquids-rich gas at its Corvus field that could supply WA well into the 2030s.
Yesterday, the company announced that drilling of its wholly-owned Corvus-2 well had confirmed a "significant" gas resource 90 kilometres north-west of Dampier.
Santos managing director Kevin Gallagher said Corvus-2 had delivered a fantastic result that opened up additional exploration opportunities in the region.
“It is particularly exciting to have realised a higher liquids content and significantly bigger resource volume than we expected,” he said.
“Corvus could be tied back to either our Devil Creek or Varanus Island gas plants... where it has the potential to increase the utilisation of our existing facilitys as well as provide backfill and extend plateau well into the 2030s.”
Shares of Santos, which was founded in 1954, have risen about 29 per cent this year, as of last close.
