Santos optimistic on dividends

SANTOS has flagged the prospect of resuming dividends this year amid a slow recovery in oil prices and as production ramps up at its flagship liquefied natural gas plant in Queensland.

The optimism comes despite the oil and gas producer posting another full-year loss, – $US1.05 billion ($1.36 billion) – following a loss of $1.95 billion the previous year.

The latest loss was due to the $US1.1 billion writedown the group took in the first half on the value of the Gladstone LNG project, southeast of Rockhampton.

Underlying profit, which strips out the impact of such one-off items, rose 29 per cent to $US63 million.

“We have gone from a business struggling at low oil prices to a business that can sustain through the cycle,” chief executive Kevin Gallagher said.

The company has ramped up production at Gladstone and gained from the nearly 40 per cent rebound in oil prices last year.

Santos said it axed 580 jobs, cut capital expenditure by 51 per cent and garnered $US447 billion through asset sales during the year.

It also cut net debt by $US1.3 billion to $US3.5 billion by the end of December.

It will review the position on dividends in its half-year results, due in August.

Santos suspended dividends last August.

Also yesterday Whitehaven Coal revealed its first-half profit had skyrocketed thanks to a jump in coal prices late last year and also its increased production.

The miner’s net profit of $157.5 million for the six months to December is up from $7.8 million a year ago. Revenue also jumped sharply – 43 per cent – to $823.5 million.

Shares in Santos yesterday closed 2¢ higher at $3.99.

Whitehaven stock fell 7¢, or 2.4 per cent, to $2.87.