The Santos Ltd (ASX: STO) share price is in the green today amid the company releasing quarterly results.
At the time of writing, Santos shares are trading at $8.32, a 1.09% gain.
Let's take a look at what the company reported today.
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Santos share price heads north following quarterly update
Highlights included:
- Record production of 26 million barrels of oil equivalent (mmboe)
- Sales revenue of US$1.9 billion, 25% more than the previous quarter
- Sales revenue up 99% on prior corresponding period (pcp) of Q1 2021
- Free cash flow of US$865 million, a 186% boost on pcp.
What happened during the quarter?
Santos reported record production, sales revenue, and free cash flow in the first quarter of 2022.
Sales volumes were higher due to the completion of the Oil Search merger in December 2021. This was partially offset by lower domestic gas volumes in Western Australia.
Sales revenues were higher due to both the merger and higher gas, LNG, and oil prices.
The average realised LNG price for the quarter was US$13.77 per metric million british thermal unit (mmBtu), up nearly 1% from the prior quarter. However, it was more than double the US$6.12 price realised in the pcp.
Santos sold 13 LNG cargoes in the first quarter. Santos also delivered the 2022 Climate Change Report outlining the company's vision for a cleaner energy future.
Between 1 January and 31 March, the Santos share price gained 17.1%.
Management commentary
Commenting on the results, managing director and CEO Kevin Gallagher said:
Today's results demonstrate that our business has the size, scale and cash flows to enable Santos to deliver stronger shareholder returns.
By designing our portfolio to provide strong cash flows throughout the commodity price cycle, our disciplined, low-cost operating model has positioned us to take full advantage of the increase in commodity prices.
Our goal is to deliver superior shareholder returns while being a global leader in the transition providing cleaner energy and clean fuels that are affordable and reliable.
What's next for Santos?
Santos has maintained its guidance for 2022. This includes production of 100 to 110 millions mmboe and sales volumes of 110 to 120 mmboe. Upstream production costs are expected to be $8 to $8.50 per barrel of oil equivalent (boe).
The company is on track to achieve US$90 to US$115 million of synergies per year from the merger.
Commenting on the future outlook, Gallagher said the next stage of growth will be disciplined and phased. He added:
The Barossa project is 33 per cent complete and making excellent progress, while the Moomba carbon capture and storage project will deliver a step-change in our emissions profile when it comes online in 2024.
Santos share price snapshot
The Santos share price has surged 19% in the past 12 months. It has gained 26% in the year to date.
In comparison, S&P/ASX 200 Index (ASX: XJO) has returned 8% in the past year.
Santos has a market capitalisation of about $28 billion based on the current share price.
