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Santos Limited (ASX:STO) noted a 7% increase in quarterly sales revenue of $1,043 million and 11% jump in quarterly LNG sales revenue of $449 million. STO has also recorded a 19% jump in annual sales revenue of $3,696 million
The fourth quarter production is up by 6% to 15.9 mmboe due to a sustained strong performance from the core portfolio and acquisition of Quadrant Energy, on 27 November 2018, partially offset by lower crude oil and liquids prices and completion of the sale of Santosâ non-core Asian asset portfolio on 6 September 2018.
Almost 3.2 million barrels of oil hedging expired in the 4th quarter under the zero-cost three-way collar hedges. Following the result of the Quadrant acquisition, 1.4 million barrels of 2019 oil hedges were novated to Santos. Â
2018 Cooper Basin production posted an increase of 8% year-on-year to 15.5 mmboe, suggesting the success in arresting production decline and returning the asset to growth. With 4 rigs in operation in the fourth quarter, twenty-six wells were drilled comprising seven exploration, twelve appraisal, and seven development wells. A total of 85 wells were drilled in 2018, and Santos expects to drill ~100 wells in 2019. The eight well Moomba South appraisal program continued during the quarter with four wells successfully brought on-line at the end of the quarter and two new plays discovered. Also, during the quarter, Santos announced a project to convert beam pumps on oil wells to solar and batteries at 56 sites.
A total of 92 wells were drilled across the GLNG acreage in the fourth quarter with a record number of wells drilled (305) and connected (300) in 2018. In 2019, another 350-400 wells are expected to be drilled. 58 development wells were drilled across Santosâ non-operated Eastern Queensland acreage in the quarter.
Fourth quarter capital expenditure included $18 million for seismic acquisition and $14 million for exploration and evaluation activities, primarily in the NT, not recorded against core assets.
During the quarter, 7 near field exploration wells and 12 appraisal wells were drilled, with a further appraisal well drilling ahead at year end. Six of eight planned Moomba South appraisal wells had been completed to the end of December. Four wells were fracture stimulated and brought on-line by the end of the quarter, and a further well has been cased and suspended and awaits fracture stimulation and testing. Two wells remain to be drilled in the current campaign. The program seeks to delineate and establish initial FEED input to the potential development of a large unexploited gas contingent resource in the Patchawarra reservoirs on the southern flanks of the Moomba high. Secondary exploration targets include the Granite Wash and Tirrawarra sandstones.
Stock performance: STO stock has generated a positive return of 13.74 % over the last month. STOâs 52-week high and low are marked at A$7.480 and A$4.735 respectively. The shares of STO closed the dayâs session at A$6.190, up by 3.859% or 0.230 points as compared to the last day close of A$5.960.
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