Australia’s No. 2 independent gas producer Santos Ltd on Tuesday raised its 2020 output forecast and lowered its production cost expectations, delivering on measures taken earlier this year in response to the COVID-19 pandemic.
The Adelaide-based company lifted its production forecast to a range of 87 million barrels of oil equivalent (mmboe) to 89 mmboe, with costs expected to be between $8 and $8.5 per barrel of oil equivalent (boe).
“Our base business is strong with production levels expected to remain relatively steady for the next decade and providing significant free cash flow,” said Chief Executive Officer Kevin Gallagher in a statement.
Santos in July had forecast output of between 83 mmboe and 88 mmboe in fiscal 2020, and production costs of between $8.25 and 8.75 per boe.
Earlier this year, Santos had cut its full-year capital spending by $550 million, targeting free cash flow to breakeven at an oil price of $25 per barrel.
The company on Tuesday also hiked its expectations of cost savings from the integration of ConocoPhillips’ Northern Australia business to a range of $90 million to $105 million per year, from $50 million to $75 million per year forecast earlier.
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