Santos' forecasts for 2024 production are at the top of the forecast range, and Pikka oil production could start early
Santos, Australia's second largest oil and gas company, estimated that its production for the full year would be in the upper half of its forecast range and announced on Thursday that its Pikka Project could begin oil production as soon as 2025.
The Adelaide-based firm said that its drilling program for Pikka Phase one in Alaska is progressing smoothly and could begin oil production as soon as December 2025. For now, the company is maintaining its first production forecast in mid-2026.
The company expects that the development capital for Pikka Phase one will increase by around 20%.
Jarden wrote in a letter that "the 20% capex is higher than we expected, and we think the consensus has also higher capex. However, we suspect it may be higher by 20% than anticipated."
The potential for acceleration appears positive, but we'll need to wait until April or March to see if this is possible.
The company's shares rose up to 1.4% early in the day before reversing their gains and ending the session at 0.3%. Santos, which could be a target for a buyout after talks to merge with Woodside Energy and create a global LNG company worth $52 billion fell through, posted a sequential 3% drop in quarterly sales revenue of $1.27 billion. This was below Visible Alpha's estimate of $1.32billion.
The oil and natural gas giant said that the revenue drop was due to lower volumes of crude oil, condensate, and liquefied gas (LNG), partially offset by higher prices realized for LNG and domestic gases.
Santos reported that domestic sales of gas and production of ethane decreased during the third quarter, due primarily to planned maintenance.
Santos said that its Moomba carbon storage and capture project, located in South Australia, is now operational. Meanwhile, the Barossa gas project, which is situated offshore Australia, is expected to be completed in the third quarter 2025. Reporting by Sneha Kumrah, Echha Jin and Rajasik Mukherjee from Bengaluru. Editing by Tasim Zaid and Alan Barona.
(source: Reuters)
