Santos Ltd. posted first-half 2026 production of 45.6 million barrels of oil equivalent (mmboe), a 3% increase from the prior half, as the Barossa LNG project in Australia’s Northern Territory and the Pikka oil development in Alaska supported output growth.
The company raised its full-year 2026 production guidance to 99–105 mmboe, up from the previous range of 95–101 mmboe, and lifted sales volume guidance to 102–108 mmboe. Second-half 2026 production is forecast to rise 20–30% compared with the first half.
Barossa LNG confirmed a well capacity of 300 million standard cubic feet per day for each of its six wells, with seven cargoes loaded in H1 and 12 year-to-date by the August 19 presentation. Pikka achieved first oil in May 2026 and lifted its first cargo of 450,000 barrels in August, with gross production reaching about 23,000 barrels per day at the end of June. The project targets a gross plateau rate of roughly 80,000 barrels per day by late Q3 2026, to be maintained for five to six years.
Santos drilled 29 development wells at Pikka, with 23 stimulated and flowed back. The company’s liquefied natural gas operations maintained high reliability, with PNG LNG exceeding 99%, GLNG at 100%, and Darwin LNG also at 100%. Total gross LNG production reached 7.7 million tonnes in H1.
First-half 2026 sales revenue rose to $2.62 billion from $2.58 billion a year earlier, while EBITDAX declined to $1.56 billion from $1.76 billion. Free cash flow from operations fell to $378 million from $1.09 billion, and underlying profit dropped to $397 million from $508 million. The interim dividend was set at 11.6 U.S. cents per share, totaling $377 million, equivalent to about 100% of free cash flow from operations.
Unit production costs improved to $7.53 per barrel of oil equivalent, down from $8.45 in 2016, with upstream production unit costs at $6.80 per barrel. Net debt stood at $6.0 billion, with gearing at 28.1% including operating leases and 23.2% excluding them. Liquidity totaled $3.8 billion, comprising $1.13 billion in cash and $2.65 billion in undrawn committed facilities. No debt maturities are due until September 2027.
Santos maintained a BBB-/stable credit rating from S&P, BBB/stable from Fitch, and a positive outlook with a Baa3 rating from Moody’s. Capital expenditure for 2026 is estimated at $1.95–2.15 billion, excluding capitalized interest. The company hedged 11.5 million barrels of oil for H2 2026 using zero-cost collars with a floor of $67.10 per barrel and an average cap of $98.59 per barrel.
Santos set a free cash flow breakeven target of $45–50 per barrel for 2026–2030, down from $59 in 2025 and $82 in 2024. Brent sensitivity is projected to add $550–600 million in free cash flow for every $10 increase above breakeven once Barossa and Pikka reach plateau. The company is on track to achieve $150 million in annual recurrent cost savings by the end of 2026, including a 10% headcount reduction, and aims to reduce net debt by $2.5 billion by 2030.
