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Barossa Gas Project: Learn more


Strong free cash flow and liquidity

  • Strong operational performance delivered US$265 million of free cash flow in the first quarter
  • Targeting 2020 free cash flow breakeven oil price of US$25 per barrel
  • Liquidity of over US$3 billion at the end of the quarter, comprising US$1.15 billion in cash after payment of the 2019 final dividend in March and US$1.9 billion in committed undrawn debt facilities
  • Net debt was US$3.1 billion, including ~US$400 million in AASB16 lease liabilities, and gearing was 29%

Disciplined operating model driving stronger onshore performance

  • Cooper Basin gas production was the highest in nine years driven by strong flow rates from new wells. The Cooper Basin produced at an annualised rate of 17.6 mmboe in the quarter, achieving the 2025 production growth target range ahead of expectations
  • GLNG produced at an annualised rate of 6.4 mtpa in the quarter
  • 112 new wells drilled across Santos’ operated onshore assets despite significant wet weather impacts

Balanced and diversified portfolio with 70% of volumes fixed-price

  • First quarter production of 17.9 mmboe was 4% lower than the prior quarter, primarily due to an unplanned domestic gas customer outage in Western Australia and the impact of Cyclone Claudia, partially offset by stronger Cooper Basin and Queensland-operated onshore production
  • Approximately 70% of forecast production volumes for the remainder of 2020 are fixed-price, comprising:
    • Fixed-price domestic gas sales contracts, and
    • 14 million barrels of oil hedged at an average floor price of US$39/bbl with upside participation

COVID-19 response and lower oil price environment

  • On 23 March, Santos announced financial measures in response to the lower oil price environment, including a US$550 million (38%) reduction in 2020 capital expenditure, a US$50 million reduction in cash production costs and a target free cash flow breakeven oil price of US$25 per barrel
  • Growth projects deferred until business conditions improve
  • Announced an agreement to sell a 25% interest in Darwin LNG and Bayu-Undan to SK E&S for
    US$390 million and a letter of intent to sell a 12.5% interest in Barossa to JERA. Currently in discussions for the sale of further equity in Barossa in line with previously stated target ownership level of around 40%
  • The company’s debt covenants have sufficient headroom and are not under threat at current oil prices for a number of years
  • S&P Global Ratings reaffirmed Santos’ investment grade credit rating with stable outlook


Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos has implemented a series of measures to protect the health and safety of its people and to ensure it continues to provide secure energy supply for customers, which is vital in the current global and national crisis.

“In response to COVID-19, the financial initiatives we announced on 23 March demonstrated we are taking decisive action to ensure Santos is well-positioned in a lower oil price environment. Production levels from our current assets are relatively steady for the next four or five years without any new growth projects and all our major capital projects are yet to take final investment decisions, providing flexibility in commitment timing.”

“Our disciplined, low-cost operating model continues to drive strong performance. Free cash flow generation from our portfolio of low-cost assets was US$265 million in the first quarter. Our oil assets performed well with strong realised prices in the quarter, while our onshore assets performed particularly strongly including the highest quarterly Cooper Basin gas production in nine years and GLNG operating above guidance at 6.4 mtpa.”

”For the remainder of 2020, around 70% of our forecast production volumes are either fixed-price domestic gas contracts or oil hedged at an average floor price of US$39 per barrel.”

“The current environment is a time for discipline. We have a strong liquidity position with over US$3 billion available and we have sufficient headroom in our debt covenants for a number of years at current oil prices.”

“The COVID-19 crisis continues to put demand pressure on industries across the globe and we are not immune. I remain confident our disciplined, low-cost operating model is built to see Santos through these challenging periods and today’s results are a strong base for us to build on as we fight current low oil prices and COVID-19. Santos is well positioned to leverage the opportunities when prices and demand recover, which they will,” Mr Gallagher said.