Santos Underlying Net Profit a Record $683 Million, Up 7%

Santos reported a 7% increase in underlying net profit to a record $683 million for the year ended December 31, 2006.

Earnings before interest, tax, depreciation, amortization and exploration (EBITDAX) was also a record, increasing 17% to $2.14 billion.

After adjusting for significant items, reported net profit after tax was $643 million.

The record underlying profit was driven by a 9% increase in production to 61.0 million barrels of oil equivalent (mmboe), and a 12% increase in sales revenue to $2,769 million.

The average realized gas price of $3.78 per gigajoule (GJ) and oil price of A$89.35 were 4% and 21% higher than 2005 respectively.

Production costs per barrel were reduced by 3% to $6.41 per boe, reflecting increased production from fields with low operating costs, notably the John Brookes gas field in Western Australia. Operating cashflow increased by 6% to a record $1,550 million.

The reported net profit of $643 million was $40 million below the underlying net profit due to three factors, namely a net provision for the Banjar Panji incident of $67 million, an impairment write-down of $14 million and a gain on asset sales of $41 million.

Commenting on the 2006 results, Santos' Managing Director, Mr. John Ellice-Flint, said "Santos' operational performance was excellent in 2006, resulting in record production, a record underlying profit, and increased booked reserves."

"The dispatch of the first LNG cargo from Darwin, and the start-up of the Maleo and Casino gas fields were important milestones for us.

"Also, early results from the Cooper Basin Oil Project exceeded our expectations, with 2P reserves of 15 million barrels added – over twice the target amount.

"On the exploration front, the discovery and successful appraisal of oil in Vietnam in the Blackbird and Dua fields was a major positive, and development options are now being studied for these fields."


Santos' final dividend was maintained at 20 cents per share, fully franked.

Total dividends paid during 2006 were 40 cents per share, up 11% from 36 cents per share in 2005. The final dividend will be paid on 2 April 2007 to registered shareholders as at March 5, 2007.