Santos in good stead

Analysts had forecast a steady first-half profit of about $210 million. Adding in gains from the halving to 30 per cent of its equity in the $15 billion Gladstone liquefied natural gas project helped push net profit to a record $504 million for the half, lifting earnings per share to 57.4? from 23.7?.

The group's large spending program prompted a cut in the interim dividend to 15? a share from 22?, which is payable on September 30.

Directors flagged no rise in the dividend until at least 2015 due to large capital demands.

Nomura Australia analyst Xavier Grunauer said the results came in ahead of expectations and the company will likely have a strong second half.

"Unlike Woodside and Oil Search, which have large projects which take several years to come on stream, Santos has a number of near-term projects to maintain interest in the stock."

Nomura has a "buy" recommendation on the shares, with a $16.10 valuation.