Santos Ltd (ASX: STO) released its 2018 half year financial results to the market today revealing a doubling of underlying profit.
Santos is one of Australia’s largest oil and gas companies.
Here are some of the highlights from its result, all amounts are in US dollars:
- Sales up 16% to $1.68 billion
- EBITDAX rose 23% to $883 million (click here to learn what EBITDA means)
- Underlying profit grew 99% to $217 million
- Interim dividend of 3.5 cents per share declared
The rising oil price has been a beneficial component of the Santos result, the Brent Crude price has risen to US$74.66 per barrel according to Bloomberg.
Santos CEO and Managing Director Kevin Gallagher said: “Our strategy has been to establish a low-cost operating model that delivers strong cash flows through the oil price cycle.”
He was pleased to point out that the growth was achieved despite the loss of production from its PNG operations due to an earthquake.
Quadrant Energy acquisition
Santos is acquiring 100% of Quadrant Energy from various stakeholders including Wesfarmers Ltd (ASX: WES) and Macquarie Group Ltd (ASX: MQG) for a total price of US$2.15 billion.
Mr Gallagher said that this acquisition will strengthen Santos’ offshore operating capability and it is “materially value accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier.”
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