Santos (STO) Q3 2024 earnings summary

Executive summary

• Free cash flow from operations reached ~$400 million for Q3 2024, up from $377 million in Q2 2024, with year-to-date free cash flow at nearly $1.5 billion.

• Sales revenue was $1.3 billion, down 3% sequentially, and production decreased 3% quarter-on-quarter to 21.6 mmboe.

• Major projects advanced: Moomba CCS phase one is online, Barossa Gas project is 82% complete, and Pikka phase one is 67% complete.

• Operational excellence and safety were emphasized, with successful maintenance shutdowns and project execution.

Financial highlights

• Q3 2024 sales revenue: $1,269 million, down 3% from Q2 2024; year-to-date revenue: $3,980 million, down 10% year-over-year.

• Production for Q3 2024: 21.6 mmboe, down 3% sequentially; year-to-date: 65.6 mmboe, down 4% year-over-year.

• Capital expenditure for Q3 2024: $709 million, down 8% from Q2 2024; year-to-date capex up 22% year-over-year.

• Gearing at 21.7% (excluding leases), or 25.0% including leases.

• LNG average realised price increased to $12.69/mmBtu (oil-indexed) and $12.47/mmBtu (JKM indexed) in Q3 2024.

Outlook and guidance

• 2024 production guidance: 84–90 mmboe, with volumes expected in the top half of the range.

• 2024 sales volume guidance: 87–93 mmboe.

• Sustaining capex guidance: ~$1.25 billion; major projects capex: ~$1.6 billion.

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

• No change to 2024 capital expenditure guidance despite Pikka phase one cost increase.