Santos today hosts its 2026 Investor Briefing Day in Sydney to present its strategy and financial framework entitled ‘Focus on tier-1 basins. Growing free cash flow. Delivering shareholder returns.’
Key highlights include:
- Tier-1 one assets transforming the portfolio: Barossa is online and now at 75 per cent of planned 2026 production rates, targeting plateau production mid-2026, with unit production cost less than $7/boe. Pikka phase 1 in Alaska is also online producing intermittently during final commissioning activities, and continuous production imminent. Targeted plateau production of approximately 80,000 bopd (gross) is expected in the third quarter of 2026 at a unit production cost less than $8/boe.
- Disciplined capital allocation framework will drive shareholder value: Santos are to deliver disciplined growth within the target breakeven price of $45-50/bbl and return at least 60 per cent of free cash flow to shareholders when it transitions to the revised capital allocation framework.
- Cash flow inflection point is now: Once Barossa and Pikka are at plateau rates, for every $10 the realised oil price is above the free cash flow breakeven oil price, Santos expects to generate $550-600 million in free cash flow annually.
- Net debt reduction: Santos is targeting gearing at the lower end of the 15 to 25 per cent range through net debt reduction of approximately $2.5 billion by 2030. This will reduce annual interest by approximately $150 million, building financial strength and strategic flexibility to support value-accretive production growth.
- Strategic review outcomes: Santos’ Australian domestic oil and gas business will be repurposed as a lower capital-intensity, higher-margin business focused on meeting domestic gas and decommissioning commitments.
- Capex reduction: As a result of the strategic review, upstream investment will be prioritised in the Moomba Central fields area and deprioritised in the broader Cooper Basin, targeting cumulative capex reduction of ~$300 million from 2027 to 2030, and $150 million savings annually thereafter.
- Leveraging Santos’ midstream position and technology: Creating long-term value through simplification, infrastructure optimisation and industry-leading energy solutions capability, Santos is targeting lower cost, improved efficiency and lower emissions.
- Three regions with tier-1 basins: Santos will focus its growth investment on LNG and oil across three regions to develop tier-1 basins in Alaska and Papua New Guinea and fully appraise Australia’s Beetaloo and Bedout basins, to provide scale and higher margins leveraging off existing advantaged infrastructure positions.
Managing Director and Chief Executive Officer Kevin Gallagher said, “Over the last ten years Santos has transformed its cost base and built one of the most compelling portfolios in the global oil and gas sector through divestment of non-core assets, timely mergers and acquisitions in assets we know, and organic growth to unlock the value of our high-quality upstream portfolio.
“Santos has been unrelenting in sticking to our strategy to backfill, sustain and decarbonise our operations, build and grow the portfolio, and develop low-carbon fuels as markets evolve – a strategy that has delivered, and will continue to deliver, strong shareholder returns.
“Current global instability has brought energy security sharply into focus. This has only reinforced the value of Santos’ diversified asset portfolio and geographic proximity to the fastest growing demand markets in the Asia Pacific.
“The start-ups of Barossa and Pikka phase 1 are a defining moment for Santos. Production from these two major growth projects will now deliver a step-change in our free cash flow generation.
“The strategic review of our Australian domestic oil and gas business has taken place amidst unprecedented market volatility and a changing policy landscape in Australia. Investment will be prioritised in the value-accretive growth portfolio, while our Australian domestic oil and gas business will be repurposed into a lower capital-intensity and higher-margin business focused on meeting our domestic gas and decommissioning commitments. In the Cooper Basin alone, focusing on higher-margin production in the Moomba Central fields area – and deprioritising the development of other areas of the Cooper – is expected to keep production around current levels but save $300 million in capex between 2027 and 2030, and save an additional $150 million annually thereafter.
“Going forward, Santos will be laser focused on investment in major oil and LNG production across three regions as we develop tier-1 basins in Alaska and Papua New Guinea and fully appraise Australia’s Beetaloo and Bedout basins to provide scale, higher margins and leverage off existing advantaged infrastructure.
“Santos remains committed to our capital allocation framework that will drive shareholder value, deliver disciplined growth within the target breakeven price of $45–50/bbl, and return at least 60 per cent of all-in free cash flow to shareholders.
“We are also announcing a net debt reduction target of $2.5 billion by 2030 that will reduce annual interest by approximately $150 million as we continue to target gearing at the lower end of our target range.
“Santos now has the scale and cost base to deliver strong returns throughout the commodity price cycle while maintaining and building the financial strength to fund value-accretive production growth for the future,” said Mr Gallagher.
Live Webcast
A live webcast of the 2026 Investor Briefing Day will be available on the Santos website at www.santos.com from 8:30 AEST today.
Ends.
This ASX announcement was approved and authorised for release by Kevin Gallagher, Managing Director and Chief Executive Officer
