Santos announces 2025 fourth quarter report

Outstanding base business performance

• Free cash flow from operations of ~$380 million for the fourth quarter, up 30 per cent on the prior quarter, ~$1.8 billion for the full year.
• Free cash flow from operations breakeven price of less than $30/bbl for the full year.
• Production of 22.3 mmboe for the fourth quarter, up five per cent on the prior quarter, full year production 87.7 mmboe.
• Sales volumes of 24.8 mmboe for the fourth quarter, up 15 per cent on the prior quarter, full year sales volumes 93.5 mmboe.
• Sales revenue of more than $1.2 billion in the fourth quarter, up nine per cent on the prior quarter, full year sales revenue more than $4.9 billion.
• Full year unit production cost below $7/boe (excluding Bayu Undan) and within guidance.
• Gearing 26.8 per cent (21.5 per cent excluding operating leases), down 1.4 per cent from end of the prior quarter.

Barossa LNG – first LNG cargo loading underway

• The BW Opal FPSO continued start up and commissioning activities while ramping up gas export volumes, now at ~450 mmscf per day which is around 75 per cent of plant capacity. The six-well drilling program in the Barossa gas field was successfully completed and all six wells have been tested. All wells have intersected excellent reservoir quality with average individual well potential deliverability of ~300 mmscf per day.
• LNG production commenced following completion of the Darwin LNG life extension project and cool down of the LNG train and storage tank.
• Following the end of the quarter, the first LNG cargo has been sold on a delivered ex-ship (DES) basis. The cargo is currently being loaded at Darwin LNG and will be delivered to the Sakai terminal in Japan.

   

Pikka phase 1 – nearing mechanical completion

• Pikka phase 1 is 98 per cent complete and nearing mechanical completion, with commissioning progressing. Twenty-four wells were drilled and completed at the end of the fourth quarter. The 23rd well achieved the highest productivity to date, producing at an initial rate of approximately 8,000 bbl per day. The 24th well was the second combination well, developing two reservoir sections from the one well.
• As Pikka phase 1 nears first production, following the final cost and schedule review, capital expenditure for phase 1 has increased by approximately $200 million Santos share (less than 10 per cent of the total Pikka phase 1 project costs). The majority of this expenditure relates to facilities and has been incurred in 2025. Santos’ total 2025 capital expenditure remains at the lower end of original guidance, with the Pikka phase 1 cost increase offset by lower-than-planned capital expenditure elsewhere in the portfolio.
• The Pikka phase 1 increase reflects inflationary pressure on labour and materials across the North Slope, tariffs on production modules for the sea water treatment plant and logistics costs relating to the MacKenzie River transit.
• The project remains on track for first oil late in the first quarter of 2026, with ramp up to plateau expected around the middle of the year.

Operational excellence

• The PNG Hides F2 well was completed and a safe, accelerated start up commenced in the fourth quarter, with initial production rates averaging 60 mmscf per day.
• Western Australia domestic gas production increased by approximately 19 per cent compared to the prior quarter, following successful shutdowns in the third quarter at the Varanus Island and Macedon facilities, and implementation of the Varanus Island compression project phase 2, which developed around 24 mmboe of 2P reserves.
• Cooper Basin output recovered to pre-flood levels with 91 wells successfully returned to production in the fourth quarter. Drilling activity continued uninterrupted in 2025, with 104 wells drilled for the full year despite flood-related disruptions, supporting a near-term increase in production compared to the previous quarters.
• GLNG delivered full year LNG production of 6 Mt. The Roma field achieved record daily production of 223 TJ per day. Scotia delivered record average daily production of 105 TJ per day over the fourth quarter. Arcadia achieved facility reliability above 98 per cent. Development activities at Fairview continued to progress during the quarter, with 21 wells drilled as part of the ongoing Fairview SD25 and EE Phase 1 programs (116 wells total).
• Signed a well-priced mid-term LNG portfolio supply contract to supply approximately 0.6 Mtpa over a period of up to five years from 2026.
• A drilling rig was secured for the Beetaloo Basin program consisting of a 2-3 well campaign planned for the third quarter of 2026. All regulatory approval applications required for the appraisal program were submitted and consultation with Traditional Owners was undertaken.
• Moomba Carbon Capture and Storage phase 1 (Moomba CCS) continues to perform to plan, safely and permanently storing more than 1.5 Mt of CO2e since start-up. Moomba CCS met the high compliance standards of the Clean Energy Regulator and received 907,872 Australian Carbon Credit Units in the fourth quarter, covering the period from project commencement in September 2024 to June 2025.

Disciplined capital management

• Raised $1 billion senior unsecured fixed-rate bond at 5.75 per cent maturing November 2035.
• Accelerated the final repayment to close the PNG LNG project finance facility.
• Executed a conditional sale and purchase agreement to divest non-core 42.86 per cent interest in the Mahalo Gas Project (Bowen Basin, Queensland) to Comet Ridge Mahalo Limited for A$40 million upfront consideration and up to A$20 million in contingent payments linked to production milestones.
• Completed the divestment of non-core 42.71 per cent interest in the Petrel field and 100 per cent interest in the Tern fields in the Bonaparte Basin (offshore Northern Australia), to Eni Australia.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said that continued focus on operational excellence across our base business, disciplined execution of major development projects and an unwavering commitment to safety underpinned Santos’ performance throughout 2025.

'Personal and process safety, and environmental performance, was outstanding, with the company in the top quartile of global industry benchmarks for personal safety and better than global average for process safety and environment performance,' Mr Gallagher said.

'The fourth quarter lifted free cash flow for the full year to approximately $1.8 billion, a strong result in a year of relatively soft commodity prices for the industry, which demonstrates the value of our focus on margin in our marketing and trading activities.

'The performance of the base business has been a real highlight in 2025 with strong production despite the impact of the biggest floods in the Cooper Basin since the 1970s.

'Santos now has a strong platform for production growth with Barossa’s first LNG cargo currently loading at Darwin. We have taken a very considered approach to the final stages of commissioning to ensure offshore operations achieve a steady state, high level of reliability as quickly as possible once full production is achieved. Following two connection failures on the utilities and firewater mains GRE pipework systems, a campaign to strengthen all similar connections across the FPSO was undertaken which caused delays of approximately two months to our production ramp up schedule. While this was disappointing our aim is to commission the facilities and to identify and rectify any vulnerabilities to support our objective of achieving a high reliability operation for the long term. Our focus is now on safely and reliably increasing Barossa gas production to deliver long-term value for shareholders in line with our FID promise.

'We are also moving close to first production from Pikka, positioning the company to deliver sustainable returns to our shareholders and continue to reinvest in the business to grow production.

'Drilling at Pikka continues to perform strongly, with the 23rd well achieving the highest productivity so far, with an initial rate of approximately 8,000 barrels of oil per day. The 24th well was the second combination well, developing two downhole reservoir sections with one well. The drilling capability and innovation developed at Pikka will underpin our strategy for future developments.

'Once at full rates, Barossa LNG and Pikka phase 1 together are expected to lift Santos’ production by around 25 to 30 per cent by 2027 compared to 2024 levels.

'Moomba CCS continues to be a great success, performing to plan. It has met the strict performance requirements of the Clean Energy Regulator, resulting in the issuance of more than 900,000 Australian Carbon Credit Units which cover the project’s contribution to emissions reduction from start-up in September 2024 to June 2025.

'Santos’ financial performance and disciplined approach to capital management were reflected in several key activities during the period, including the issuance of a $1 billion ten-year bond to enhance financial flexibility, the early repayment of the PNG LNG project finance facility, the divestment of two non-core assets to sharpen portfolio focus and the receipt of the Fluor settlement proceeds. These measures have reinforced the strength of Santos’ balance sheet and reflect our continued focus on disciplined capital allocation and long-term shareholder value.

'Santos remains laser focused on executing our strategy in line with our disciplined, low-cost operating model and capital allocation framework. This discipline combined with an all-in free cashflow break-even target of $45 to 50 per barrel, will position Santos over the next few years to deliver sustainable results and provide strong returns for our shareholders,' said Mr Gallagher.

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Source: Santos