Santos flags $328 mln hit to annual results, gets regulatory nod for Dorado (updated)

Carnarvon Energy

13/02/2023 22:51

(Updates with detail on Dorado approval, context)
       Feb 14 (Reuters) - Australia's Santos Ltd  STO.AX  expects a total
impairment charge of about $328 million before tax in its full-year results
following a review of its assets, the company said on Tuesday, and added that it
has received regulatory approval for its Dorado oil and gas project.
    Santos said the country's offshore energy regulator approved its Dorado
project to undertake phase 1 liquids development necessary to begin further
stages of development.
        The progress on the project comes at a time when the country is battling
a power crunch, posing major challenges for the Labor government that wants to
speed up the shift to greener power.
        "Dorado will provide a welcome boost to Australia's energy security,
while the potential subsequent gas development provides a future source of
supply for Western Australia's domestic market and LNG projects," said Chief
Executive Officer Kevin Gallagher.
    The Adelaide-based company in August had indefinitely delayed approval for
the project due to rising costs, shipyard backlogs, stressed contractors and
reworking of project plans.
        Santos holds an 80% stake in the Dorado project, with the rest owned by
Carnarvon Energy  CVN.AX .
        Meanwhile, an annual reserves and resource review revealed Santos'
proved plus probable reserves to be at record 1,745 million barrels of oil
equivalent (mmboe) at the end of last year, an increase of 171 mmboe before
production, the company said.
        The review also revealed a 26 mmboe reduction in Western Australia,
primarily from an earlier-than-expected water ingress at the Spar/Halyard field.
As a result, Santos in its full-year results on Feb. 22 is expected to record a
charge of $147 million.
        It also flagged another $181 million before tax charge recorded owing to
a review of its other late-life producing and exploration assets.
 (Reporting by Sameer Manekar and Savyata Mishra in Bengaluru; Editing by
Shailesh Kuber)
 ((Sameer.Manekar@thomsonreuters.com;))