Santos has delivered a strong operational first-quarter performance for fiscal 2026, driven by a 1 per cent lift in production and significant progress across its major growth projects in Alaska and Northern Australia.
The company reported production of 22.5 million barrels of oil equivalent (mmboe) for the quarter ended March 31, a 3 per cent increase on the same period last year.
This translated into sales revenue of approximately US$1.27 billion, while the business generated a solid US$383 million in free cash flow from operations.
Managing Director and CEO Kevin Gallagher highlighted that the company is on the cusp of a major production ramp-up. In Alaska, the Pikka phase 1 oil project has reached mechanical completion.
“Our focus remains on safe and reliable operations across our base business, disciplined capital allocation and delivering our projects,” the CEO said.
“As Barossa ramps up and Pikka phase 1 comes online, Santos is well positioned to deliver production growth within the $45 to 50 per barrel all-in free cash flow break even target range for the business.
“This will set Santos up to deliver sustainable, long-term value and competitive shareholder returns.”
Twenty-seven development wells have been drilled to date in Pikka phase one, with first sales oil expected to enter the pipeline network within the coming weeks. The project is slated to reach plateau production by the third quarter of 2026.
Meanwhile, the Barossa LNG project is overcoming commissioning hurdles. After replacing dry gas compressor seals during a recent shutdown, the Floating Storage and Offloading (FPSO) facility is expected to begin ramping up production in April, with LNG exports to follow shortly after.
The quarter was also marked by a resounding success at the Quokka-1 appraisal well in Alaska. The well confirmed a high-quality reservoir with a flow rate of 2,190 barrels of oil per day.
More importantly, the oil found is of a higher gravity than Pikka oil, potentially fetching a premium price and extending Santos’ long-term development runway in the region.
Domestically, Santos reinforced its commitment to Australian energy security, signing a 10-year, 200-petajoule conditional gas sales agreement with the South Australian government.
The company also reached a final investment decision on the Moomba Central Optimisation project, which aims to deliver over $600 million in savings through modernised infrastructure.
Santos maintained its 2026 guidance with production volumes at 101 to 111 mmboe and total capital expenditure at US$1.95 billion to US$2.15 billion.
