Australian natural gas company, Santos Limited (ASX: STO) has provided a report on Shareholder Review 2018. In the report, the company has provided a financial review of FY 2018 and an update on the performance of its assets.
The report contains a message from the company’s Chairman Mr. Keith Spence and from the company’s Managing Director (MD) and Chief Executive Officer Mr. Kevin Gallagher. As per the release, the management has informed that Santos is having a diversified portfolio of five core assets. Each generates free cash flow at an oil price of less than US$40 per barrel. The company’s focus on low cost, efficient operations ensure that in a lower oil price environment the company can continue to fund the Transform, Build, grow strategy and in a rising oil price environment, benefit from higher margins.
In FY 2018, the company delivered a 129% growth in its underlying net profit after tax which reached to $727 million. In 2018, the company also delivered a 63% increase in free cash flow to a record $1 billion and an 18% increase in sales revenue to a record $3.7 billion. The company declared Dividends of US9.7 cents per share, fully-franked, including a final dividend of US6.2 cents per share. In FY 2018, the company reported sales volume of 78.3 mmboe and production of 58.9 mmboe.
In August 2018, the group announced the acquisition of Quadrant Energy for US$2.15 billion. During 2018, Santos completed studies indicating a positive potential for carbon capture, and storage which includes miscibility testing, static reservoir modelling, and concept studies.
Currently, Santos is actively pursuing a project to capture CO2 emissions from the ‘Moomba’ processing plant and inject it into Cooper Basin oil reservoirs to increase oil production from these reservoirs. In September 2018, the company announced a dedicated appraisal program to test the potential for CO2 injection.
Moreover, the company has also published its climate change report for 2019. In the report, the company has informed that it recognizes the science of climate change and it supports the objective of limiting global temperature rise to less than two degrees Celsius. The company’s strategy focuses on natural gas which it believes will continue to play a key role in a low carbon future.
Now, let us have a quick look at Santos Limited’s stock performance and the return it has posted over the last few months. The stock last traded at a price of $6.970 (+0.432% intraday) with a market capitalization of ~$14.46 billion as on 21 February 2019. The counter opened the day at $7.130, reached the day’s high of $7.150 and touched the day’s low of $6.740 with a daily volume of ~7,553,447. The stock has provided a Year Till Date return of 31.44% & also posted a return of 10.86%, 16.05% & 13.77% over the past six months, three & one-months period respectively. It had a 52-week high price of $7.480 and touched 52 weeks low of $4.800, with an average volume of 5,747,298 approximately.
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