Santos Ltd (ASX: STO) shares are under pressure on Wednesday, even after the energy giant delivered another positive operational update.
In morning trade, the Santos share price is down 5.44% to $7.65, after falling as low as $7.47 shortly after market open.
Even after today's pullback, the stock remains up roughly 24% since the start of 2026, reflecting what has still been a strong run.
Today's announcement highlighted another successful Alaska appraisal result, while also showing that two of Santos' biggest production projects remain on track.
Here's what the market is watching.
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Alaska appraisal adds more momentum
According to the release, Santos has successfully completed the Quokka-1 appraisal well in Alaska's North Slope.
The well encountered a high-quality reservoir with 143 feet of net oil pay in the Nanushuk formation and delivered a strong flow rate of 2,190 barrels of oil per day during testing.
Management said the result further confirms the quality and scale of the Quokka resource, which sits close to the company's existing Pikka development.
Santos now expects the Quokka discovery could support a two-drillsite development comparable in size to Pikka phase 1, with contingent resource estimates and further appraisal work due during FY26.
Chief Executive Kevin Gallagher said the result further supports Santos' Alaska growth outlook.
He added:
The Quokka-1 results demonstrate the exceptional quality of the Nanushuk reservoir and confirm our geological assessment of this significant accumulation.
Pikka and Barossa updates support the bigger picture
The announcement also included progress updates on Santos' two major near-term production catalysts.
At Pikka phase 1, the project is now moving through its final commissioning stages.
The company said mechanical completion of commissioning activities is progressing well, fuel gas has been introduced to the plant, and first oil is expected in the coming weeks.
Santos is still targeting plateau production of 80,000 barrels per day by mid 2026.
Meanwhile, the Barossa LNG project continues moving toward full rates after recent commissioning constraints linked to the floating production storage and offloading vessel.
Santos said dry gas sales have already begun, with production restart expected around 18 April.
Together, these projects are expected to drive a significant lift in Santos' production across 2026 and 2027.
Earlier this year, Reuters reported that once Barossa LNG and Pikka phase 1 reach full rates, they could lift Santos' production by around 25% to 30% by 2027 compared with 2024 levels.
With a market capitalisation of about $24.9 billion, Santos remains one of the ASX energy sector's largest companies.
