Australian oil and gas producer Santos has raised its production guidance for 2026 as it ramps up gas production at its offshore Barossa gas project in the Northern Territory and its Pikka project in Alaska.
The company estimates its production volumes to reach 101 million to 111 million barrels of oil equivalent (mmboe) for the 12 months ending December 31, up from its 2025 output of 87.7 mmboe.
Barossa LNG and the start of oil production at Pikka Phase 1 in Alaska are expected to boost production by around 25 per cent to 30 per cent by 2027 compared to 2024 levels.
Santos reported cash flow from operations of AU$380 million for the fourth quarter, up 30 per cent from the previous quarter. Cash flow for the full year amounted to AU$1.8 billion.
Santos CEO Kevin Gallagher said the company focused on a disciplined execution of its major projects, which underpinned its performance throughout 2025.
“The performance of the base business has been a real highlight in 2025 with strong production despite the impact of the biggest floods in the Cooper Basin since the 1970s,” Gallagher said.
“The fourth quarter lifted free cash flow for the full year to approximately $1.8 billion, a strong result in a year of relatively soft commodity prices for the industry, which demonstrates the value of our focus on margin in our marketing and trading activities.”
Gallagher said the oil and gas producer now has a strong platform for production growth as Barossa’s first LNG cargo has been sold and is currently being loaded at Darwin LNG for delivery to the Sakai terminal in Japan.
“We are also moving close to first production from Pikka, positioning the company to deliver sustainable returns to our shareholders and continue to reinvest in the business to grow production.”
As Pikka phase 1 nears first production, following the final cost and schedule review, capital expenditure for phase 1 has increased by approximately $200 million for Santos’ share.
Santos’ total 2025 capital expenditure remains at the lower end of original guidance, with the Pikka phase 1 cost increase offset by lower-than-planned capital expenditure elsewhere in the portfolio.
The Pikka Phase 1 project remains on track for first oil late in the first quarter of 2026, with ramp-up to plateau expected in the middle of the year.
