(Jeff J Mitchell / Getty Images)
- Santos is up more than 8% in early trade after doubling underlying profit.
- The company announced that it will pay a fully-franked US3.5 cents per share.
- The company has also acquired WA-based oil & gas company Quadrant Energy for $2.15 billion.
Santos shares are almost 10% higher this morning after the company announced half-year underlying profit of $217 million.
Net profit after tax was $US104 million, a significant turnaround from the same time last year when the company booked a $US506 million loss.
Higher oil prices were the catalyst for a 16% rise in revenue to $US1.68 billion, up from $US1.45 billion.
A short time ago, shares in the company were up by around 9%:
Earlier this year, the company from US private equity group Harbour Energy at slightly above $6 per share.
“Our strategy has been to establish a low-cost operating model that delivers strong cash flows through the oil price cycle,” CEO Keven Gallagher said.
“Strong free cash flow has enabled the company to reduce net debt to US$2.4 billion and reinstate dividends to shareholders.”
Santos announced a fully-franked interim dividend of US3.5 cents per share, in accordance with a payout ratio of between 10-30%.
The company is also back on the acquisition trail, have announced the 100% purchase of WA-based Quadrant Energy for $US2.15 billion in cash.
Santos said it’s aiming to achieve synergies of between $30-$50 million from the deal, and leverage Quadrant’s offshore operating ability across WA and NT.
“Consistent application of our disciplined operating model continued to deliver cost reductions in the first half, with underlying production costs down 4% and further efficiency gains in onshore drilling confirming Santos as Australia’s lowest cost onshore operator,” Gallagher said.
“We will shortly achieve our net debt reduction target, more than a year ahead of schedule, and therefore have a significantly stronger balance sheet to support our growth strategy.”