Santos has delivered another solid quarter, revealing increased production, higher LNG sales and US$465 million free cash flow from operations in its 2025 First Quarter Report.
The company reported a nine per cent increase on free cash flow from the previous quarter, from sales revenue of US$1.3 billion.
Santos also saw strong financial reports, driven by operational excellence. This includes:
- Increased production of 21.9 million barrels of oil equivalent (mmboe), up two per cent on Q4 2024, driven by higher production from Western Australia
- Sales volumes of 23.3 mmboe, down one per cent on the prior quarter. LNG sales were three per cent higher than Q4 2024, offset by lower liquids sales
- Gearing is at 22.2 per cent, excluding operating leases (25.1 per cent when included)
- Unit production cost for the year is expected to be within market guidance.
The company also reported maximised production through existing infrastructure.
Western Australian production volumes increased by more than 18 per cent on the prior quarter, driven by the Halyard-2 infill well.
Continued high reliability of 99.8 per cent from the operated gas facilities and high throughput at PNG LNG resulted in full plant capacity in the first quarter. Santos said this was supported by strong Angore production.
The company reported a record daily GLNG upstream production from Scotia field of 97.3TJ per day, supporting an annualised run rate of 6.0Mt of LNG for the quarter.
In Q1, Santos also executed a Memorandum of Understanding (MOU) with Tamboran Resources for a joint study on Beetaloo gas export options through Darwin, where the company has approved its expansion capacity to a maximum of 10Mt of LNG per annum.
Santos also provided an update on its development projects nearing production.
Barossa LNG is 95.2 per cent complete – with the Gas Export Pipeline and Darwin Pipeline Duplication complete, the majority of subsea infrastructure installed and the FPSO shipyard commissioning more than 90 per cent complete.
Four wells have been drilled and completed, a fifth well is suspended for later completion and drilling of the sixth well is in progress. Production from four wells is capable of delivering full production rates at DLNG. The project remains on track for first gas in the third quarter of this year.
Pikka phase 1 is 82.2 per cent complete and average well flow rates at 6,900bbls/day. The 120-mile pipeline is now substantially complete.
Santos said while there is no change to market guidance of first production in mid-2026, this creates the opportunity for an early startup, subject to weather and logistics, which will become clearer in the second quarter.
Kevin Gallagher, Santos Managing Director and CEO said the solid quarter of production and cash flow generation from the company’s diversified portfolio demonstrates the strength of its disciplined low-cost operating model.
“The business remains strong and resilient, maintaining free cash flow from operations breakeven oil price less than US$35 per barrel in 2025,” Gallagher said.
“Despite volatile capital markets and commodity prices, Santos stayed focused on operational and project execution excellence, and the company continued to perform well. Our LNG contract portfolio provides flexibility and positions Santos to capitalise on emerging market opportunities amid ongoing volatility.”
Gallagher said Santos’ development projects are nearing completion within cost and schedule guidance, with production expected to increase by more than 30 per cent by 2027 once the Barossa and Pikka projects are online.
“These two world-class projects are expected to set the company up with long-term, stable cash flows to underpin competitive shareholder returns in line with our commitment to return at least 60 per cent of all-in free cash flow to shareholders, and up to 100 per cent when gearing falls below our target range.
“Moomba Carbon Capture and Storage (CCS) is online and performing as predicted. In the first six months of operations, more than 685,00t (gross) of CO2-equivalent were injected for safe, permanent storage.”
Gallagher said CCS underpins the company’s decarbonisation strategy, which was overwhelmingly endorsed by its shareholders at its Annual General Meeting in April.
“Whilst the current market environment is challenging, our focus in 2025 remains clear: operating our base business safely and reliably, bringing our development projects online within guidance and staying focused on cost of supply.
“Our portfolio is resilient in a volatile environment and we have an advantaged geographical position into regions with growing demand and highly sought after products.”
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