By Rhiannon Hoyle


Santos Ltd. reported record production, sales revenue and free cash flow for its first quarter, as the Australian energy company benefited from its takeover of Oil Search in December as well as higher prices for oil and natural gas.

Santos on Thursday said it produced 26.0 million barrels of oil equivalent in the first quarter of the year, up from 24.8 million a year earlier.

A mix of higher volumes and stronger commodity prices led to a jump in first-quarter sales revenue to almost US$1.92 billion, double the year-earlier period. Free cash flow surged to US$865 million from US$302 million a year earlier.

Santos's acquisition of Oil Search represented a doubling down on production of oil and natural gas even as some rivals seek to transition away from fossil fuels. However, it also coincided with a sharp rise in energy prices that accelerated following Russia's invasion of Ukraine.

"By designing our portfolio to provide strong cash flows throughout the commodity price cycle, our disciplined, low-cost operating model has positioned us to take full advantage of the increase in commodity prices," Chief Executive Kevin Gallagher said. The result shows Santos has "the size, scale and cash flows" to strengthen shareholder returns, he said.

While the merger increased Santos's total production volumes, the company did report expected natural field decline at the Bayu-Undan field in the Timor Sea and lower gas volumes in Western Australia.


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


(END) Dow Jones Newswires

04-20-22 2015ET