KEY HIGHLIGHTS
- Continued strong operating performance with best personal safety result on record, no lost-time injuries and no Tier 1 process safety incidents
- First-half production of 45.6 mmboe, up 3 per cent on the prior corresponding period
- Sales revenue of $2.6 billion
- EBITDAX of $1.6 billion
- Net profit after tax of $355 million, underlying profit of $397 million
- Free cash flow from operations of $378 million from strong base business performance, offset by commissioning and cargo timing effects expected to unwind in the second half
- Interim dividend declared of US 11.6 cents per share unfranked, totalling $377 million
- Gearing at 23.2 per cent excluding operating leases (28.1 per cent when leases included) and strong liquidity with no debt maturities until September 2027
- Pikka first oil achieved safely in May, continuous production from June and first crude oil cargo lifted in August 2026
- Barossa delivered seven cargoes by end of June with another five cargoes delivered since 1 July. Currently producing at around 550 mmscf/d
- Moomba CCS has stored around 2.3 million tonnes of CO2 equivalent since start-up
Santos has announced its half-year results for 2026, reflecting a period of transition for the company as the Pikka project commenced production, Barossa continued to progress through commissioning and ramp-up, underpinned by the base business which performed strongly. First-half production was 45.6 mmboe, up 3 per cent on the prior corresponding period. Sales revenue was $2.6 billion, EBITDAX was $1.6 billion and free cash flow from operations was $378 million.
The free cash flow result reflects the impact of commissioning activities at Barossa and Pikka, the timing of cargo movements around 30 June and a PNG under-lift position of around 1.3 million barrels of oil equivalent. These impacts are expected to unwind early in the second half as production increases and the PNG under-lift position is reversed.
The Board has resolved to pay an interim dividend of US 11.6 cents per share, consistent with Santos’ capital allocation framework and reflecting its view of the expected full year performance outlook.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos was entering the second half from a stronger operating position.
'The first half marked an important step forward for Santos. We brought the Pikka project online safely and continued to progress Barossa through commissioning towards steady-state production, while the base business continued to perform strongly.
'Pikka achieved first oil in May, moved to continuous production in June and we lifted our first crude oil cargo last week. Production is expected to build towards the 80,000 bbl/d gross plateau late in the third quarter, and our drilling program is consistently beating technical limits, reducing the time and cost to drill a well.
'Barossa is safely progressing through commissioning to steady state production, with current production around 550 mmscf/d and planned to increase further to around 600 mmscf/d by end of the quarter. At steady state production the current cargo cadence is one approximately every eight days, while Darwin LNG delivered 100 per cent plant reliability in the first half.
'With the major development build and peak major project capex for Barossa and Pikka behind us, second-half production is expected to be around 20 to 30 per cent higher than the first half, supporting stronger free cash flow and returns for shareholders.
'The Papua LNG project remains a focus for the second half, and is on track for a final investment decision, targeted for the fourth quarter of 2026. Project financing continues to progress well, with at least 60 per cent targeted to be funded through project financing facilities. Strong performance from the base business and continued capital discipline are funding investment in the next generation of low-cost, high-margin production growth opportunities in our deep portfolio.
'That same discipline is securing the long-term future of the Cooper Basin, where we took a final investment decision on the Moomba Central Optimisation project, targeting more than $600 million in capital and operating cost savings over the life of Central Fields, and up to $3 a barrel reduction in Cooper Basin unit production costs. A prepayment on our gas sales agreement to supply 200 petajoules of domestic gas to the South Australian Strategic Gas Reserve from 2030 to 2040 is supporting our investment in the project. This is exactly where we want to invest – in high-return opportunities in and around infrastructure we already own and operate.
'With liquidity of $3.8 billion and no debt maturities before September 2027, the balance sheet is well positioned to fund disciplined, value-accretive production growth for the future and support our target to reduce net debt by $2.5 billion by 2030,' Mr Gallagher said.
Source: Santos
