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Highlights

  • Santos generated free cash flow of USD 1.8 billion and reported underlying NPAT of USD 898 million for FY2025.
  • The company declared a final dividend of US 10.3 cents per share, bringing total FY2025 dividends to US 23.7 cents per share, equating to USD 770 million in shareholder returns.
  • Production for 2025 reached 87.7 mmboe, with sales volumes of 93.5 mmboe generating revenue of USD 4.9 billion.

Shares in Santos Ltd (ASX:STO) fell 3.30% to AUD 6.45 on 18 February 2026, even as the energy producer reported higher free cash flow and a full-year dividend increase. The stock is up 5.05% over the past month but remains down 18.97% over six months and 6.39% over the past year.

Despite share price drop, Macquarie Group issued an Outperform rating with a target price of AUD 7.77. EODHD/Others consensus data indicates a Buy rating with an average target price of AUD 7.29.

With the stock trading at AUD 6.45, broker targets imply potential upside based on current pricing.

Financial Performance and Cash Flow

Santos delivered annual production of 87.7 million barrels of oil equivalent (mmboe) and sales volumes of 93.5 mmboe. Revenue for the year totalled USD 4.9 billion.

Underlying net profit after tax came in at USD 898 million, while free cash flow reached USD 1.8 billion. Unit production costs were reported at USD 6.78 per barrel of oil equivalent (boe), excluding Bayu Undan, marking the lowest level in a decade.

Gearing stood at 21.5% excluding leases, or 26.9% including leases, with liquidity remaining available to support capital programs and project execution.

Dividend and Capital Returns

The Board declared a final dividend of US 10.3 cents per share, unfranked. Together with the interim dividend of US 13.4 cents per share, total FY2025 dividends reached US 23.7 cents per share.

This represents a total cash return of USD 770 million to shareholders, equivalent to 43% of free cash flow from operations. The payout follows the achievement of first cargo at Barossa and Darwin LNG in early 2026.

Operational Update and Cost Outlook

Santos reported its best personal safety performance on record and a 10-year best process safety outcome.

The Moomba carbon capture and storage project has stored more than 1.5 million tonnes of CO₂ equivalent since start-up.

As major growth projects transition into the base business, the company is targeting a headcount reduction of around 10% as part of cost management initiatives.

2026 Guidance Maintained

Guidance for 2026 remains unchanged. Production and sales volumes are expected to be between 101 and 111 mmboe.

Total capital expenditure is forecast at approximately USD 1.95 billion to USD 2.15 billion, with unit production costs guided to USD 6.95 to USD 7.45 per boe.

Santos reported USD 1.8 billion in free cash flow, maintained its dividend policy and reiterated 2026 guidance. Despite the share price decline on the day of release, broker targets remain above current levels. Investors are now likely to monitor production delivery, cost performance and capital allocation through 2026.

Frequently Asked Questions

  1. Why did Santos shares fall despite reporting profit growth?
    The share price declined 3.30% on the day of the result, even though Santos reported USD 898 million in underlying NPAT and maintained guidance. Market movements can occur despite positive financial metrics.
  2. What dividend did Santos declare for FY2025?
    Santos declared a final dividend of US 10.3 cents per share, bringing total FY2025 dividends to US 23.7 cents per share.
  3. What is Santos’ production guidance for 2026?
    The company expects production and sales volumes between 101 and 111 mmboe for 2026, with capital expenditure of approximately USD 1.95 billion to USD 2.15 billion.