Highlights

  • Santos reported higher quarterly production, sales volumes and free cash flow for Q4 2025.
  • Barossa LNG began first cargo loading, while Pikka Phase 1 approached first oil.
  • Santos shares closed 4.70% higher at AUD 6.34 on 22 January.

Santos Limited (ASX:STO) released its fourth quarter report for the period ended 31 December 2025, outlining higher production, sales volumes and free cash flow compared with the previous quarter. Free cash flow from operations reached approximately USD 380 million during the quarter, reflecting a 30% increase quarter-on-quarter, while full-year free cash flow totalled around USD 1.8 billion. The company reported a full-year free cash flow breakeven price of below USD 30 per barrel.

Fourth quarter production rose 5% from the previous quarter to 22.3 million barrels of oil equivalent (mmboe), bringing full-year production to 87.7 mmboe. Sales volumes increased 15% quarter-on-quarter to 24.8 mmboe, with full-year sales volumes of 93.5 mmboe. Sales revenue exceeded USD 1.2 billion for the quarter, up 9% from Q3, while full-year revenue reached more than USD 4.9 billion.

Project developments and operations
Commissioning work at the Barossa LNG project progressed during the quarter, as gas export volumes increased to around 450 million standard cubic feet per day, representing roughly three-quarters of processing capacity. LNG output began after the Darwin LNG life extension program was completed. Subsequent to the quarter’s close, the project recorded its first LNG sale on a delivered ex-ship basis, with the cargo currently being loaded for shipment to Japan.

Pikka Phase 1 was 98% complete at the close of the quarter, with commissioning activities in progress. Twenty-four wells had been drilled and completed, including a well that recorded an initial production rate of around 8,000 barrels per day. Capital expenditure for Pikka Phase 1 increased by approximately USD 200 million (Santos share), largely due to inflationary pressures and logistics costs, while total 2025 Capital expenditure remained within guidance.

Operationally, Western Australia domestic gas production increased by approximately 19% quarter-on-quarter, and Cooper Basin output recovered following flood-related disruptions earlier in the year. GLNG delivered full-year LNG production of 6 million tonnes, with record daily production achieved at several fields.

Financial position and capital management
Gearing declined to 26.8% at the end of the quarter. Santos raised USD 1 billion through a senior unsecured bond maturing in 2035 and completed the early repayment of the PNG LNG project finance facility. The company also divested several non-core assets during the period.

Share performance
Santos share was traded at AUD 6.34 at the time of writing on 22 January, rising 4.70% on the day. The stock gained 4.70% over the past month but remained down 19.38% over six months and 11.01% over the past year.