Santos Delivers $508M Underlying Profit, Accelerates Pikka First Oil to 2026

Santos Ltd (ASX: STO) has posted strong half-year 2025 results, underpinned by resilient LNG pricing, robust free cash flow, and steady project execution.

The Australian energy producer reported free cash flow from operations of US$1.1 billion in the first half of 2025, alongside sales revenue of US$2.6 billion and an EBITDAX of US$1.8 billion. The company delivered a net profit after tax of US$439 million and an underlying profit of US$508 million, broadly in line with the prior year.

The Santos board declared an interim dividend of US13.4 cents per share, franked to 10%, representing 40% of free cash flow and totalling US$435 million, an increase on the prior year. Gearing stood at 23.7%, with liquidity of US$3.9 billion.

Average realized LNG prices were robust at US$11.57 per mmbtu, with the company highlighting strong performance from its LNG marketing division, recently securing deals with tier-one buyers including QatarEnergy Trading LLC. Santos noted that about 90% of its equity LNG portfolio is contracted over the next five years, benefiting from high heating values and proximity to Asian markets.

On the project front, Santos achieved a major milestone at Darwin LNG, reaching ready-for-startup (RFSU). The Barossa LNG FPSO is more than 98% complete and expected to achieve RFSU in the coming weeks, with first gas imminent. Meanwhile, in Alaska, the Pikka phase 1 oil project is advancing ahead of schedule, with seawater treatment facilities and processing modules now on site. First oil guidance has been accelerated to the first quarter of 2026, with the development expected to add significantly to production growth.

Santos CEO Kevin Gallagher said the results underline the resilience of the company’s low-cost operating model and its ability to self-execute large-scale projects. “Another strong cash flow year from our long-life gas assets has enabled us to deliver shareholder returns while investing in Barossa and Pikka, which together are expected to deliver a ~30% increase in production by 2027,” he said.

The company also recognized a non-cash impairment charge of US$119 million related to the Hides footwall in PNG. Unit production costs excluding Bayu-Undan were US$7.28 per boe, reflecting efficiency gains.

Santos has committed to delivering US$150 million in annual structural savings, aiming to bolster margins against a backdrop of global cost inflation and commodity price volatility.

The strong operational performance and imminent startup of Barossa LNG position Santos to increase production and cash flows, reinforcing its ability to sustain shareholder returns while progressing new growth projects.

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