Key Highlights

  • Third quarter production of 26.3 mmboe was 13.9 per cent above the prior quarter and 23 per cent above the prior corresponding period.
  • Sales revenue of $2,006 million rose 49 per cent on the second quarter, with the average LNG price at US$16.22/mmBtu.
  • Free cash flow from operations was about $1,069 million, and free cash flow was about $957 million.
  • 2026 production guidance was narrowed to 99 to 102 mmboe from 99 to 105 mmboe.

Santos Limited (ASX:STO) reported third quarter 2026 production of 26.3 million barrels of oil equivalent (mmboe), up almost 14 per cent on the second quarter and 23 per cent on the third quarter of 2025. Year-to-date production reached 71.9 mmboe, almost 10 per cent above the prior corresponding period. The result reflected Barossa reaching steady production and the start of oil output from the Pikka project in Alaska.

Sales volumes were 26.4 mmboe, 11 per cent higher than in the prior quarter, and sales revenue was about $2,006 million, an increase of 49 per cent on the second quarter and 78 per cent on the third quarter of 2025.

Cash Flow, Revenue and Pricing

Free cash flow from operations was about $1,069 million for the quarter and about $1,447 million year to date. Free cash flow was about $957 million for the quarter and about $839 million year to date. Around 50 per cent of the quarter's free cash flow came from international operations in Papua New Guinea and Alaska.

LNG revenue was $1,363 million, compared with $901 million in the second quarter and $689 million a year earlier. The average realised LNG price was US$16.22 per mmBtu against US$11.21 in the second quarter and US$11.05 a year earlier. The three-month lagged JCC averaged $111 per barrel, up from $67, and realised JCC prices were the highest since the fourth quarter of 2022. The realised crude oil price fell to US$99.04 per barrel from US$120.33 in the second quarter.

Capital expenditure excluding capitalised interest was $511 million, up 6.2 per cent on the prior quarter and down from $631 million a year earlier.

Barossa, Pikka and the Operated Base

Northern Australia production rose to 4.0 mmboe from 1.7 mmboe in the second quarter. Darwin LNG operated at 98.5 per cent reliability, ten LNG cargoes and two condensate cargoes were lifted, and feed gas reached a new peak of about 600 mmscf per day.

At Pikka, Alaska production was 1.0 mmboe. Output reached instantaneous rates above 80,000 barrels per day gross before the end of the quarter, and was about 69,000 barrels per day at quarter end, compared with about 23,000 at the end of June. Production was curtailed twice, after a weather event affected the Seawater Treatment Plant and when the Kuparuk pipeline operator shut in following a road accident. Output is planned to be held at about 70,000 barrels per day while water injection replenishes reservoir voidage, before rising to 80,000. Five cargoes were lifted, two carrying Santos equity volumes, and 32 development wells have been drilled.

Elsewhere, PNG LNG reliability exceeded 98 per cent, supporting an annualised 8.7 Mtpa run rate, and GLNG upstream production held at 697 TJ per day gross with 22 cargoes shipped.

Growth Agreements, Beetaloo and Guidance

Santos signed a binding agreement to acquire a further 3.3 per cent of Papua LNG from TotalEnergies, lifting its interest to 21 per cent after the State back-in, subject to approvals and a final investment decision planned for the fourth quarter of 2026. With its GLNG partners, Santos agreed to acquire the Greater Meridian coal seam gas project in Queensland, taking a 30 per cent interest and becoming operator, and it sold its Mahalo interest for about A$32 million upfront, with up to A$62 million in total consideration.

In the Beetaloo sub-basin, the Jibera South 1 pilot hole reached 3,457 metres. The Velkerri C shales were better than expected and the A and B shales matched pre-drill expectations, and a 3,000-metre lateral hole will follow wireline logging.

Production guidance for 2026 was narrowed to 99 to 102 mmboe from 99 to 105 mmboe, and sales volume guidance to 102 to 105 mmboe from 102 to 108 mmboe. Capital expenditure of about $1.95 billion to $2.15 billion, unit production costs of $6.95 to $7.45 per boe and depreciation of about $2,200 million were unchanged.

Where the Numbers Leave the Company

The third quarter combined production of 26.3 mmboe, sales revenue of $2,006 million and free cash flow of about $957 million, with year-to-date production of 71.9 mmboe. Barossa reached steady production, Pikka output is planned to be held near 70,000 barrels per day, and 2026 production guidance now stands at 99 to 102 mmboe.