Santos (STO) Q2 2024 earnings summary

Executive summary

• Free cash flow from operations for H1 2024 expected at ~$1.06 billion, with $380 million in Q2, supported by strong realised prices and operational execution.

• Sales revenue in Q2 2024 was $1.3 billion, consistent with the prior year; production increased 2% quarter-on-quarter to 22.2 mmboe.

• Major projects, including Barossa Gas (77% complete), Pikka (56.2% complete), and Moomba CCS (92% complete), achieved significant milestones.

• Focus remains on disciplined, low-cost operations, project delivery, and maintaining a strong balance sheet.

Financial highlights

• Q2 2024 sales revenue: $1,313 million, down 6% sequentially; H1 2024 revenue: $2,711 million, down 9% year-over-year.

• Q2 production: 22.2 mmboe, up 2% sequentially; H1 2024 production: 44.0 mmboe, down 2% year-over-year.

• Capital expenditure in Q2: $774 million, up 13% sequentially; H1 2024 capex: $1,460 million, up 29% year-over-year.

• Gearing at 19.9% (excluding leases), 23.5% including leases.

• Average realised LNG price in Q2: $11.47/mmBtu (oil-indexed), down from $12.68/mmBtu in Q1.

Outlook and guidance

• 2024 production guidance: 84–90 mmboe; sales volumes: 87–93 mmboe.

• Sustaining capex (including decommissioning) for 2024: ~$1.25 billion; major projects capex: ~$1.6 billion.

• Unit production costs expected at $7.45–$7.95/boe for 2024.

• Barossa project on track for first production in Q3 2025; Pikka first oil expected in 2026.