Australian producer Santos has increased its 2025 output target which would see it more than double production compared to 2018.

Chief executive Kevin Gallagher revealed at the company’s investor day briefing on Tuesday that Santos had set a production target of 120 million barrels of oil equivalent by 2025, up from its previous target of 100 million boe.

The target represents a cumulative annual growth rate in production of over 8% to 2025 and is more than double what the company produced in 2018.

Helping drive the forecast production increase has been the company’s deal to acquire ConocoPhillips’ northern Australia and Timor-Leste assets earlier this year.

This will give it a larger equity interest in the Barossa development which will provide backfill gas to the Darwin liquefied natural gas facilities in the Northern Territory which Santos will also operate following the completion of the ConocoPhillips acquisition, which is expected in the first quarter of 2020.

Also driving the increased output forecast was the recent flow test of the Dorado oil discovery off Western Australia which Santos said indicated the field was capable of producing at the higher end of expectations.

Santos is targeting a final investment decision on Barossa towards the end of the first quarter of next year, while Dorado is expected to enter front-end engineering and design in the second quarter.

The expansion of the ExoonMobil-operated PNG LNG project in Papua New Guinea, where Santos holds a 13.5% stake, is expected to enter FEED next year, while Santos is also planning to ramp up sales from its operated Gladstone LNG project in Queensland to about 6.2 million tonnes per annum from 2020.

Santos has also identified additional growth opportunities at several Australian assets including Narrabri, McArthur, Petrel-Tern-Frigate and the greater Bedou basin, while it also anticipates production to grow from its operations in the Cooper basin.

“The recently announced acquisition of ConocoPhillips’ interests in northern Australia and Timor-Leste will further reduce our breakeven oil price and deliver operating interests in long-life, low-cost conventional natural gas assets and strategic LNG infrastructure,” Gallagher told investors.

“We are now positioned for disciplined growth leveraging existing infrastructure in all five of our core assets, which we believe will deliver 120 million boe by 2025.”

Santos also narrowed its 2019 production guidance on Tuesday to between 74 million and 76 million boe, compared to its previous 73 million – 77 million boe forecast.

It expects output next year to increase to between 79 million and 87 million boe.

Production

Santos sets 120 million boe target by 2025