Santos from Australia concluded 2025 with solid core business performance, steady cash flow, and significant growth initiatives entering production, highlighting the company’s capability to deliver results during a time of lower commodity prices.
The firm produced roughly $380 million in operating free cash flow during the fourth quarter, increasing the annual free cash flow to about $1.8 billion. SantossaidIts free cash flow break-even price was under $30 per barrel for the entire year, demonstrating the effectiveness of its low-cost operational structure. Annual sales revenue surpassed $4.9 billion, driven by increased sales volumes and better marketing results.
Fourth-quarter production increased by 5 percent compared to the previous quarter, reaching 22.3 million barrels of oil equivalent (mmboe), while annual output totaled 87.7 mmboe. Sales volumes saw a more significant rise, growing 15 percent in the quarter to 24.8 mmboe, due to timing factors and portfolio adjustments. Annual unit production costs were under $7 per boe, excluding Bayu Undan, and remained in line with expectations.
The key operational achievement was the start of LNG production at Barossa, as Santos announced that the first LNG shipment is currently being loaded at the Darwin LNG facility for delivery to Japan on a delivered ex-ship basis. The BW Opal FPSO is increasing gas exports at approximately 450 million cubic feet per day, which is about 75 percent of its maximum capacity. All six Barossa wells have been drilled, tested, and shown excellent reservoir characteristics, with each well’s output estimated at roughly 300 million cubic feet per day.
The start-up of Barossa comes after the completion of the Darwin LNG life extension project, which is necessary to keep the facility running into the next decade. Although commissioning was postponed by approximately two months because of repairs to GRE piping systems, Santos mentioned that the extra work was done to guarantee long-term reliability instead of increasing short-term output.
In Alaska, Santos’ Pikka Phase 1 oil project is almost mechanically complete, reaching 98 percent, with the first oil expected in the latter part of the first quarter of 2026. Drilling results have been impressive, with the top-performing well producing approximately 8,000 barrels per day. The company reported a roughly $200 million rise in its share of capital spending for Pikka Phase 1, attributed to inflation, tariffs, and transportation expenses, but mentioned that this increase was balanced by other areas within the portfolio, maintaining 2025 capital expenditure at the lower end of its forecast.
Throughout the overall portfolio, Santos noted operational enhancements in Papua New Guinea, Western Australia, the Cooper Basin, and Queensland’s LNG-connected gas assets. The Hides F2 well in PNG became operational ahead of time, while domestic gas production in Western Australia improved after significant maintenance-related shutdowns earlier in the year. In the Cooper Basin, output returned to pre-flood levels following severe weather issues, with drilling activities continuing throughout the year.
GLNG produced 6 million tonnes of LNG throughout the year, benefiting from exceptional gas supply from multiple upstream fields. Santos also obtained a mid-term LNG supply agreement for approximately 0.6 million tonnes annually starting in 2026, enhancing its position in the marketing sector.
In addition to hydrocarbons, Santos noted ongoing advancements at its Moomba carbon capture and storage initiative, which has sequestered over 1.5 million tonnes of CO₂ since it began operations and obtained more than 900,000 Australian Carbon Credit Units during the quarter.
On the balance sheet, Santos generated $1 billion by issuing a 10-year bond, speeding up the repayment of financing for the PNG LNG project, and selling non-core gas and offshore assets to refine its portfolio strategy.
Management emphasized that Barossa LNG and Pikka combined are anticipated to increase Santos’ output by 25 to 30 percent by 2027 relative to 2024 figures, setting the company up for a new stage of expansion while adhering to financial responsibility.
By Charles Kennedy for Oilprice.com
More Recommended Reads From Oilprice.com
- India Strengthening Energy Relationships with the Gulf While Managing Risks from Russian Oil
- Indian Refineries Increase Middle East Supplies to Compensate for Lost Russian Oil
- Germany’s Coal Power Stations Regain Profitability
Oilprice Intelligencedelivers the insights before they make headlines. This is the same expert evaluation accessed by experienced traders and political consultants. Obtain it at no cost, twice each week, and stay ahead of the curve regarding market movements.
Receive the geopolitical insights, concealed stock information, and market rumors that influence vast sums of money — and we’ll provide you with $389 in top-tier energy intelligence, absolutely free, just for signing up. Join over 400,000 readers right now.Access it right away by clicking here.
