Australia's Santos Ltd. flagged it may not make final go-ahead decisions on its oil projects in Alaska and Australia by mid-year, even after delivering a record annual underlying profit on the back of surging oil and gas prices, the company said on Feb. 16.

Santos had previously said it expected to make FID on its Pikka project in Alaska in the first half of 2022 and on its Dorado project off Western Australia by mid-2022, but on Feb. 15 said the two projects would be "FID-ready" by mid-year.

The caution on its growth projects came despite CEO Kevin Gallagher saying the world needs more oil and gas, following a year in which energy security issues came into the spotlight.

"It is vitally important that investment in new supply occurs and in a sustainable way," Gallagher said in a statement.

Santos shares fell 3% in early trade, against a 0.9% drop in the Australian energy index .AXEJ.

Santos more than tripled its annual underlying profit to $946 million in 2021 from $287 million a year earlier, in line with analysts' forecasts.

It delivered an annual dividend of 14 cents a share, beating forecasts for a full-year divided of 12 cents, according to Refinitiv IBES estimates.

"We will now seek to further optimize the portfolio, reduce gearing and conduct a review of our capital management framework including returns to shareholders," Gallagher said.

The company said it aims to snare between $2 billion and $3 billion from asset sales in 2022.

Santos said in January its Darwin LNG plant, which is fed by the Bayu-Undan field off northwestern Australia, was exporting all of its LNG at spot prices, which have been soaring.

However on Feb. 16, it took some of the shine off that, saying its share of Bayu-Undan production would be about 10 million barrels of oil equivalent (MMboe) less than in 2021, mainly due to the sale of 25% of its stake in the field and lower output as the field nears the end of its life.

Santos, which became a global top-20 oil and gas firm after its $6.2 billion takeover of Oil Search last year, forecast 2022 production between 100 MMboe and 110 MMboe up from 92.1 MMboe in 2021.

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