The company has increased its original 2025 target of 100 MMboe set in 2018 after its move earlier this year to acquire ConocoPhillips’ northern Australia business positioned it for more significant growth.
Valued at US$1.29 billion (AU$1.89 billion), the acquisition will see Santos acquire operating interests in Darwin LNG Bayu-Undan, Barossa and Poseidon, although it is prepared to sell down equity on some of these projects.
Santos Managing Director and CEO Kevin Gallagher said the company was in a strong position entering into a new decade.
“Our strategy has been to establish a disciplined low-cost operating model that delivers strong cash flows through the oil price cycle,” Mr Gallagher said.
“The recently announced acquisition of ConocoPhillips’ interests in northern Australia and Timor-Leste will further reduce our breakeven oil price and deliver operating interests in long-life, low-cost conventional natural gas assets and strategic LNG infrastructure.
“We are now positioned for disciplined growth leveraging existing infrastructure in all five of our core assets, which we believe will deliver 120 MMboe by 2025.”
Santos is also exercising its option to acquire an 80 per cent interest in WA-488-P, the permit of the Western Australia coast containing the Beehive prospect.
The company will earn its controlling interest from Melbana Energy in exchange for funding 100 per cent of the cost of the Beehive-1 well, with Melbana to retain a 20 per cent stake.
Beehive has a best estimate of 388 MMboe, although Santos indicated drilling activities won’t commence until 2021.
Santos intends to make a final investment decision on Barossa in the first quarter of 2020 and is targeting front end engineering and design operations on its Dorado project in Q2.
Mr Gallagher said the ConocoPhillips deal is expected to be completed early next year.
He said the company was also investing in carbon capture and storage for its operations in the Cooper Basin.
For more information visit the Santos website.
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