By David Winning

SYDNEY--Santos Ltd. made an annual net loss of US$287 million as it felt the sting of low crude-oil prices and asset impairments, most recently against resources in Papua New Guinea and Western Australia.

Santos said the annual loss for the 12 months through December compared to a US$674 million profit a year earlier. Underlying profit, which excludes impairments, fell by 60% to US$287 million.

Directors of the company declared a final dividend of 5.0 U.S. cents a share, in line with a year earlier. That brought the full-year payout to 7.1 U.S. cents a share, representing 20% of free cash flow and in line with the company's dividend policy.

Santos responded to the rout of the oil price and impact of the coronavirus pandemic by absorbing US$756 million in asset-impairment charges midway through its fiscal year, mostly against its GLNG project that turns coal seam gas into liquefied natural gas for export. Last week, Santos said it also expected a US$98 million impairment of goodwill after reclassifying some reserves in Papua New Guinea and at the Reindeer gas field offshore Western Australia.

Still, Santos has benefited from an 18% increase in production after completing a deal to acquire a basket of assets from ConocoPhillips. Those assets included the U.S. company's operations in northern Australia and East Timor, including a controlling stake in the Darwin LNG gas-export project in which Santos already is a partner.

Santos produced 89 million barrels of oil equivalent last year, supported by production of 25.4 million barrels in the final quarter of the year. Sales revenue totaled US$3.39 billion after the company's sales volumes reached 107.1 million BOE.

"The improvements in our base business in recent years were perfectly illustrated in 2020 with an average realised oil price of US$47 per barrel generating more than three times the free cash flow as generated in 2016 at a similar average oil price," said Chief Executive Kevin Gallagher.

Write to David Winning at david.winning@wsj.com

Corrections & Amplifications

This story and headline were corrected at 4:29 p.m. ET to fix the misstated Annual Loss. It is US$357, not US$287.

(END) Dow Jones Newswires

02-17-21 1625ET