Shares in Santos rose by almost 8% in morning trade following the release of its quarterly update for June.

The report showed that the company is making progress on reducing debt and cutting costs. Santos said that its cash-flow breakeven point had fallen to $US33 a barrel, down from $US36.50 in 2016.

The company said net debt had been reduced to $US2.9 billion for the June quarter, down from $US3.5 billion at the end of 2016.

“These are strong outcomes that highlight Santos’ ongoing transformation into a low-cost, reliable and high performance business with a robust asset portfolio that can generate significant free cash flow in a lower oil price environment,” said CEO Kevin Gallagher.

Today’s sharp rise in the stock price follows a rough year for the company, with Santos shares falling 38% as the company booked impairments of more than $1 billion for the year ended December 2016:

Santos also upped its production guidance in 2017 to between 57-60 million barrels of oil equivalent (mmboe).

That’s despite a small decrease in Q2 production, to 14.7 million mmboe (from 14.8 million in Q1) bringing the half year total to 29.5 million.

Production volumes have dipped slightly following asset sales at the end of 2016.

Sales for the June quarter were $US769 million, a 12% increase from the Q1 2017 total of $US684 million.

The company said in February that it would revisit the prospect of paying a dividend later this year.

Santos will release it’s half-year report for the 6 months to June next month on 24 August.

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