Full year earnings before interest, tax, depreciation, depletion and amortisation (EBITDA) were $1,061.2 million ($1,086.7 million in 2002).
On the back of the profit increase Santos also declared a fully franked final dividend of 15 cents per share.
Santos managing director John Ellice-Flint said that the increase in profits was a good result especially considering that the Australian dollar appreciated by 32 per cent over the year.
"Importantly 2003 was a year of achievement in cementing a number of important growth projects in place. Milestone projects like Bayu-Undan liquids and LNG, Mutineer-Exeter, Maleo/Oyong, Casino and John Brookes all advanced during the year. These will all translate into higher production over the next two years," said Ellice-Flint.
A number of non-core assets were also divested during the year with the company's minority shareholding in Oil Company of Australia and its interests in the Bentu and Korinci-Baru PSCs in Indonesia and a number of small fields in the United States being sold.
A portion of the company's interest in Bayu-Undan was also divested as part of arrangements to allow the LNG buyers to acquire a share in the project.
Proceeds of sale of non-current assets and controlled entities yielded cash proceeds of $130.4 million, with a total gain on sale of $59.6 million.
Increased interests were acquired in the Stag oil field and the John Brookes gas field, where operator Apache Energy recently doubled the recoverable reserves of the field to 800 billion cubic feet (Bcf) and announced a 15 year sales deal.
In 2004 Santos plans to undertake a high impact wildcat exploration program, drilling approximately 23 wells and acquiring or purchasing at least 9,700 kilometres of 2-dimensional seismic and 1,000 square kilometres of 3-dimensional seismic, for a total cost of approximately $134 million.
The program exposes investors to a mean risked resource of 106 mmboe, with an upside of over 250 mmboe.
Key wells in the first half of program are as follows: Agung, an oil prospect in the new North Bali PSC; Pohon, a deep water oil prospect in East Kalimantan; and Woodbine-1, a gas prospect in onshore Gulf of Mexico.
Ellice-Flint said that the milestones achieved by the company in 2003 continued to strengthen Santos' growth outlook.
"Prior to the Moomba incident in January we said we expected production for 2004 to be around 53 mmboe. As a result of the Moomba incident we now expect production to be around 49 mmboe. However it is important to note that business interruption after 45 days is insured. Accordingly, as previously disclosed, the financial impact of the Moomba incident on 2003 earnings is expected to be between $25 and $30 million reduction in net profit after tax.
"Production in 2004 will also depend on the performance of the new Bayu-Undan gas recycling project, which is on-track for first commercial production in April this year.
"Other new projects are being fast tracked to contribute to production in 2005."
