Santos Ltd reported first-half 2026 production of 45.6 million barrels of oil equivalent, a 3% year-over-year increase, as the Barossa and Pikka projects ramped up output. Sales revenue reached $2.6 billion, while EBITDAX totaled $1.6 billion, yielding a 59% margin in the base business. Free cash flow from operations amounted to $378 million, supporting an interim dividend of $0.116 per share, equivalent to roughly 100% of free cash flow.
The company’s realized pricing averaged $10.95 per MMBtu for LNG and $92 per barrel for crude oil. Total production comprised 57% LNG, 33% domestic gas, and 10% liquids, with upstream output in Australia and Papua New Guinea totaling 30.2 million boe. Santos’ unit production cost stood at $7.53 per boe, while net debt was approximately $6.0 billion at period end, with gearing at 28.1% including leases.
Barossa’s production reached about 550 million standard cubic feet per day, with capacity confirmed at 300 million scf per well across six wells. The project is expected to reach roughly 600 million scf per day by the end of the third quarter. Pikka, which achieved first oil in May, produced around 23,000 barrels per day by the half-year mark and is targeting a plateau of 80,000 barrels per day by late September. The project has drilled 31 development wells to date, with 28 stimulated and 25 flowed back.
Santos expects second-half production to rise 20-30% compared with the first half as both projects scale up. The company’s contracted LNG position remains approximately 80% tied to Japanese Crude Cocktail and oil indexation, with JCC trading above $100 per barrel. Long-term targets include reducing net debt by $2.5 billion by 2030 and maintaining unit production costs below $7 per boe. Shareholder returns are slated to reach at least 60% of free cash flow through the cycle.
Papua LNG remains on track for a final investment decision in the second half of 2026, with an expected plateau contribution of about 1 million tonnes per annum of equity LNG and 11 million boe annually. The company also executed a gas sales agreement for the South Australian Strategic Gas Reserve, supplying 200 petajoules of domestic gas from 2030 to 2040. Santos plans to drill three appraisal wells at Bedout in 2027, with a rig contract already awarded.
