Santos lifts output, sales as first Barossa cargo loads
Santos loaded its first LNG cargo at its Barossa project, while reporting stronger production and revenue results despite weak commodity prices in the last quarter.
The oil and gas explorer produced 22.3 million barrels of oil equivalent in the three months to December, up five per cent on the previous quarter, and full-year production was 87.7 million barrels.
Boss Kevin Gallagher said sales revenue rose 9 per cent to more than $1.2bn in the September quarter, with full-year sales revenue rising to more than $4.9bn despite difficult trading conditions.
Revenue growth was driven mostly by higher LNG and condensate sales volumes, but was partially offset by lower average realized prices across the portfolio due to a milder than average winter in Europe.
“The fourth quarter increased free cash flow for the full year to approximately $1.8 billion, which was a strong result in a year of relatively weak commodity prices for the sector and demonstrates the value of our focus on margin in our marketing and trading activities,” Mr. Gallagher said.
The future also looked bright, with Santos starting production at its Tikka project in Alaska and the first LNG cargo from the Barossa project being loaded into Darwin.
Linkage failures had delayed Barossa’s planned production ramp-up by two months due to a campaign to support similar connections across the Floating Production, Storage and Offloading system.
“We took a very careful approach to the final stages of commissioning to ensure that marine operations reached a stable state and a high level of reliability as soon as possible after full production was achieved,” Mr Gallagher said.
“Our focus now is to safely and reliably increase Barossa gas production to deliver long-term value to shareholders in line with our FID (financial investment decision) promise.”
In the early stages of Tikka and Barossa, Santos is expected to increase its production by approximately 25 to 30 percent by 2027 compared to 2024 levels.
Investors responded warmly to the report, buying up Santos shares, sending them up more than four per cent to $6.36 as of 2pm AEDT on Thursday.
The outlook for gas prices in 2026 and 2027 remains positive; Demand is expected to increase due to data center growth and the energy transition.
Santos will officially announce its full-year results on February 18.
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