Energy giant feels chill of falling prices after war boost wears off

Resource giant Santos is feeling a chill in liquified natural gas sales, with revenues and underlying profits diving in line with falling oil and gas prices, although the company lifted its dividend by 14 per cent.

Adelaide-based Santos, one of the country’s biggest oil and gas companies, said its underlying profit for the half-year to June was $US801 million ($1.24 billion), down 37 per cent, closer to levels it experienced before the Ukraine conflict sparked a global scramble for energy resources that pushed prices to record levels.

Adelaide-based Santos said its underlying profit for the half-year to June was $US801 million, down 37 per cent.
Adelaide-based Santos said its underlying profit for the half-year to June was $US801 million, down 37 per cent.Credit: Bloomberg

Prices for one-off deliveries of LNG, one of the nation’s most lucrative exports, reached unseen highs late last year after Russia’s invasion of Ukraine deepened a historic energy crisis, but they have been falling sharply ever since.

While prices remain relatively robust by historical standards, Santos reported a 21 per cent decline in revenue to around $US3 billion for the half year.

The energy major said its guidance remained unchanged and its interim dividend of US8.7¢ per share had increased by 14 per cent to $US283 million.

Santos managing director and chief executive Kevin Gallagher said the company had delivered strong free cash flow and underlying earnings.

“We remain focused on executing our strategy to backfill and sustain our existing infrastructure, decarbonise and develop our Santos Energy Solutions division,” Gallagher said.

“Our goal is to strike the right balance between disciplined and phased major project spend, returns to shareholders, and investment in new energy solutions to meet customer demand.”

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Shares were 1 per cent lower at $7.74 just after 11am AEST.

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Source: Thanks smh.com