Santos’ full year earnings before interest and tax (EBIT) improved by 23% to $574 million compared with $466 million in 2003. Net profit rose by 16% to $380 million from $327 million on group sales revenue that rose 2.5% to a record $1,501 million.

Despite record 2004 total capital spending of $930 million, gearing (net debt to total capital) increased only slightly from 22.5% to 24.4%.

Santos directors have increased the final dividend on ordinary shares from 15 cents to a fully franked 18 cents per share, taking the total 2004 dividend to a fully franked 33 cents per share, compared with 30 cents per share in each of the four previous years.

“This higher dividend is a strong signal to shareholders of the Board’s confidence that Santos will to continue to grow earnings in the future,” Santos chairman Stephen Gerlach said.

Santos managing director John Ellice-Flint said the company had achieved important goals in 2004.

“In particular, we were able to successfully implement a significant continuous improvement and productivity enhancement program, which has reduced the company workforce by 16%, halved the number of senior executives and is on track to contribute $23 million towards profit in 2005, together with achieving significant capital savings,” he said

Santos’ record $1,501 million full year sales revenue for 2004 reflected a 21.5% jump in second half sales to $910 million – a record for any half in the companys’ history.

The record sales figure for the year reflected higher average prices across most products and was achieved despite lower production and sales volumes for much of the year, largely related to the New Year’s Day fire at the Moomba facility.

Meanwhile, Santos is looking to fast-track production from Jeruk, Ellice-Flint told Dow Jones Newswires.

Since the offshore East Java discovery is in shallow waters, a platform could be pumping oil by the end of the year, Ellice-Flint said.

"If you can get that oil out of the ground early, it's beneficial to get cash-flow for the project," Ellice-Flint said.

It would also be beneficial for Santos’ share price, which fell on news that reserves and production at the Mutineer-Exeter field would be lower than predicted, reducing the corporation’s income over the next couple of years.

Santos’ profit and total reserves are healthy. The only fly in the ointment is the shortfall at Mutineer-Exeter. If Jeruk could be fast-tracked to boost revenue over the next couple of years, the company would be on a much sounder footing.

Ellice-Flint told Dow Jones Newswires that it was too early to discuss possible production rates from Jeruk, but drilling has indicated recoverable reserves could be more than the 170 million barrels of oil equivalent previously predicted by the company. Some analysts have said the Jeruk find might hold as much as 600 million barrels.

Ellice-Flint said it could be 9-12 months before a better indication of the size of Jeruk was known.

Santos has a 50% stake in Jeruk and is the operator. Its partner is PT Medco Sampang, a unit of Indonesian oil company PT Medco Energi Internasional.

In the coming year, Santos’ production was expected to be up by some 15% to about 54 million boe in 2005 and was forecast to rise by more than 10% in 2006, Ellice-Flint said.

But production forecasts depended on performance of existing fields and timing and performance of new fields.

“The year ahead will see Santos continue to advance the growth strategy across multiple fronts, including a major, potentially company-changing exploration program,” Ellice-Flint said.