Operational excellence supporting strong financial results
- Strong free cash flow from operations of ~US$465 million, up 9 per cent on the prior quarter, from sales revenue of US$1.3 billion.
- Increased production of 21.9 mmboe, up two per cent on the prior quarter driven by higher production from Western Australia.
- Sales volumes of 23.3 mmboe, down one per cent on the prior quarter. LNG sales were 3 per cent higher than the prior quarter, offset by lower liquids sales.
- Gearing is at 22.2 per cent, excluding operating leases (25.1 per cent when included).
- Unit production cost for the year is expected to be within market guidance.
Maximising production through existing infrastructure
- Western Australian production volumes increased by more than 18 per cent on prior quarter, driven by the Halyard-2 infill well.
- Continued high reliability of 99.8 per cent from the operated gas facilities and high throughput at PNG LNG resulted in full plant capacity in the first quarter. This was supported by strong Angore production.
- Record daily GLNG upstream production from Scotia field of 97.3 TJ per day, supporting annualised run rate of 6.0 million tonnes of LNG for the quarter.
- Executed Memorandum of Understanding (MOU) with Tamboran Resources for joint study on Beetaloo gas export options through Darwin, where Santos has approved expansion capacity to a maximum of 10 million tonnes of LNG per annum.
Development projects nearing production
- Barossa LNG is 95.2 per cent complete with the Gas Export Pipeline and Darwin Pipeline Duplication complete, the majority of subsea infrastructure installed and the FPSO shipyard commissioning over 90 per cent complete. Four wells have been drilled and completed, a fifth well is suspended for later completion and drilling of the sixth well is in progress. Production from four wells is capable of delivering full production rates at DLNG. The project remains on track for first gas in the third quarter of this year.
- Pikka phase 1 is 82.2 per cent complete and average well flow rates at 6,900 bbls/day. The 120-mile pipeline is now substantially complete. While there is no change to market guidance of first production in mid-2026, this creates the opportunity for an early startup, subject to weather and logistics which will become clearer in the second quarter.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said that Santos delivered another solid quarter of production and cash flow generation from our diversified portfolio, demonstrating the strength of our disciplined low-cost operating model.
“The business remains strong and resilient, maintaining free cash flow from operations breakeven oil price less than US$35 per barrel in 2025.
“Despite volatile capital markets and commodity prices, Santos stayed focused on operational and project execution excellence, and the company continued to perform well. Our LNG contract portfolio provides flexibility and positions Santos to capitalise on emerging market opportunities amid ongoing volatility,” Mr Gallagher said.
“Our development projects are nearing completion within cost and schedule guidance. When the Barossa and Pikka projects come online, production is expected to increase by more than 30 per cent by 2027. These two world-class projects are expected to set the company up with long-term, stable cash flows to underpin competitive shareholder returns in line with our commitment to return at least 60 per cent of all-in free cash flow to shareholders, and up to 100 per cent when gearing falls below our target range.
“Moomba CCS is online and performing as predicted. In the first six months of operations, more than 685,000 tonnes (gross) of CO2-equivalent were injected for safe, permanent storage. Carbon capture and storage (CCS) underpins our decarbonisation strategy which was overwhelmingly endorsed by our shareholders at our Annual General Meeting last week,” Mr Gallagher said.
“Whilst the current market environment is challenging, our focus in 2025 remains clear: operating our base business safely and reliably, bringing our development projects online within guidance and staying focused on cost of supply. Our portfolio is resilient in a volatile environment and we have an advantaged geographical position into regions with growing demand and highly sought after products,” Mr Gallagher said.
