Santos Limited (ASX: STO) has today reported a 48% fall in first half net profit to $262m, compared to last year (2011’s numbers included a number of asset sales). The company’s underlying profit rose 20% to $283m, beating analyst expectations. The market certainly liked the result, with Santos shares rising 3.2% to $11.78 at the close.
During the half, Santos produced 25.4 mmboe (million barrels of oil equivalent), a rise of 11%, which contributed to sales revenues rising 27%. Production for the full year is expected to be between 51 and 55 mmboe.
But Santos’ future is all about gas.
The company is ramping up its capital expenditure as it looks to get two liquefied natural gas (LNG) projects into production. GLNG or Gladstone LNG, in which Santos owns 30%, is expected to come on stream in 2015, whilst its PNG LNG project (13.5% interest) is on track for first production in 2014.
The company also has an interest in another two LNG projects. Santos has an 11.5% stake in Darwin LNG, operated by ConocoPhillips, and a 40% interest in Bonaparte LNG, a proposed floating LNG project in the Timor Sea.
The Motley Fool
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