Capex Data
The 2008 outlook is for higher capital investment totalling approximately $1,500 million, with the allocation reflecting a balance between near term production imperatives and the transformational growth projects which provide exposure to higher global pricing.
Near term projects to extend the Company's base business include Henry, Reindeer, Kipper, Cooper Oil and Phase 2 of the Oyong field development.
Transformational projects include Gladstone LNG, coal seam gas exploitation and PNG LNG.
In exploration, the Company's 2008 plan of $200 million is focussed on a stronger, balanced, moderate risk, material exploration program in Australia and Asia.
The Santos strategy of focusing on Gladstone LNG benefits from strong government support, industry leading reserves and a proven track record of Coal Seam Gas production.
The increases in the Company’s investment program necessary to execute the strategy will be funded from cash flow and portfolio rationalisation. Importantly, Santos have received strong preliminary interest from potential partners in relation to Gladstone LNG, and are evaluating the merits of introducing a suitable joint venture partner.
Future Plans
Santos’ 2008 guidance is for production of between 56 and 58 mmboe.
Beyond that, the Company anticipates a return to growth in 2009, followed by further increases in production in 2010 and beyond as CSG production ramps-up, and new projects such as Henry, Kipper, Chim-Sao (formerly named Blackbird) and Reindeer come on-line.
Looking forward to 2013/14, Santos anticipates a step change in production as the Gladstone LNG, PNG LNG and potentially Darwin LNG expansion projects come on-line. Revenue and margin growth will accelerate ahead of production growth as the Company’s strategy to expose its large scale resource base to global pricing is realised.