Santos has upgraded its 2025 production outlook to 120 million barrels of oil equivalent from 100 mmboe, indicating a cumulative annual growth rate of more than 8 per cent.
Australia’s number two independent gas producer said today it also expected capital expenditure in 2020 to increase to a total of $1.45 billion, up 45 per cent from 2019, including spending of $500 million for its key growth projects in Australia and Papua New Guinea.
Santos also forecast initial oil production from its Dorado field off Port Hedland, one of its key growth projects, would be between 75,000 and 100,000 barrels per day, up from an earlier estimate of 50,000bpd.
The company’s stock was down one per cent to $8.09 at 8.30am, against a 1.68 per cent decline for the S&P-ASX200.
Santos, which owns an 80 per cent stake in Dorado and is the operator, said it expected the development of the oil field to cost between $1.9 billion and $2.2 billion. Carnarvon Petroleum owns the remaining 20 per cent.
Dorado is considered Australia’s biggest oil find since 1996.
In October, Santos further consolidated its position in the global gas market by acquiring the northern Australian business of ConocoPhillips in a $1.39 billion deal, which is expected to increase Santos’ output by 25 per cent.
Santos expects the development cost for its Barossa project off WA’s North West to be $4.7 billion, which the company is aiming to develop to keep the Darwin LNG plant open.
The Bayu-Undan gas field that currently feeds the plant is set to run dry in 2022.
The company narrowed its 2019 production guidance range to between 74mmboe and 76mmboe from its previous forecast of 73mmboe to 77mmboe.