In Santos' half-year results for 2024 video, the company's top executive Kevin Gallagher said that in Alaska the Phase 1 Pikka project has progressed on all major work packages and completed a strong first winter season with 40 miles of pipeline out of 120 miles installed, as well as all 4,841 vertical support members required to complete the pipeline.
Phase one of the Pikka Project is nearing 60% complete and first oil is expected in H1 2026.
The drilling program is now on the eleventh well. Six wells have been stimulated and flowed back with encouraging results in line with prognosis.
Pikka is a low carbon-intensity project that will be net-zero scope one and two emissions from first production, said Gallagher, who is Santos' managing director and chief executive officer.
Gallagher also introduced encouraging information on the long-term demand for oil, specifically "forecasts indicate that even in the most aggressive transition scenarios" there is demand for new supply, with "projects such as Pikka... well-positioned to meet ongoing demand."
In arriving at the 60% complete number, Santos averaged out several of the work packages, such as drilling progressing at 42%, pipelay VSMs at 100% and seawater treatment plant barge and module fabrication at 74%.
The most recent well achieved technical drilling limit across several sections with best non-productive-time to date, Santos noted in a presentation slide that included the following: "Six wells have been stimulated and flowed back. Post-well test modelled results achieved pre-drill average rate requirements needed to fill the facility in 2026."
North Slope infrastructure construction and installation is listed at 44% complete.
Under construction mobile fabrication for the processing plant, well site and connecting infrastructure are estimated at 86% complete.
Summary
In its Aug. 19 ASX release summary Santos listed the following:
--Strong free cash flow from operations1 US$1.1 billion (down 5%).
--Record interim dividend of US$422 million (49% increase). US13 cents per share unfranked.
--Stable production of 44 million barrels of oil equivalent (down 2%).
--Robust sales revenue of US$2.7 billion (down 9%).
--Strong delivery of major projects (Moomba CCS in final stages of commissioning, Barossa nearing 80% complete, on track for Q3 2025, Pikka phase one nearing 60% complete, first oil expected H1 2026).
--2024 guidance remains unchanged.
Gallagher said Santos has delivered strong cash returns from its operating business as a result of its high-performance culture, disciplined low-cost operating model and consistently prioritizing safe and reliable operations.
"Today's results demonstrate the capability of Santos to generate strong cash flow from operations, deliver significant progress on major projects and deliver competitive, reliable shareholder returns. The disciplined low-cost operating model underpins our business, and we continue to manage our cost base to be resilient through all scenarios and price cycles," he said.
"We remain focused on delivering our major growth projects with Moomba Carbon Capture and Storage phase one in the final stages of commissioning, Barossa is on schedule to come online within the next year and Pikka in 1H 2026," Gallagher said.
--KAY CASHMAN
