Santos Ltd (ASX: STO) shares are pushing higher on Thursday, with the energy giant back in focus following its latest quarterly release.
The stock is up 3.36% to $7.69 in late morning trade.
That builds on a solid run this year, with Santos shares now up around 25% in 2026.
Here's what is driving the latest move.
Image source: Getty Images
Revenue lifts as pricing and mix improve
Santos reported sales revenue of $1.27 billion for the March quarter, up 3% on the prior quarter.
The increase was supported by stronger crude oil sales and higher third-party LNG volumes.
Total sales volumes came in at 24.2 million barrels of oil equivalent, down 2% on the previous quarter.
Production edged higher to 22.5 mmboe, a 1% increase, reflecting contributions from recent developments.
Pricing across the portfolio was mixed.
Crude oil prices rose compared to the prior quarter, while LNG-linked pricing held broadly steady.
Free cash flow from operations was $383 million, in line with the previous quarter.
Major projects continue to move forward
The update pointed to continued progress across Santos' development pipeline.
The Pikka Phase 1 project in Alaska reached mechanical completion early in the quarter.
Fuel gas introduction and commissioning activities are underway, with first oil targeted in 2026.
At Barossa LNG, the FPSO is preparing to ramp up production following recent commissioning work.
Some delays were flagged during commissioning, though equipment issues have now been addressed.
The project is set to support future production growth.
Elsewhere, appraisal work at the Quokka discovery confirmed a high-quality resource base, supporting further development planning.
Strong operating performance across core assets
Operationally, Santos continues to run its base assets at steady production levels.
PNG LNG maintained uptime above 98%, delivering an annualised run rate of 8.6 Mtpa.
GLNG also delivered steady output, with production holding at a similar level to recent quarters.
Across Australia, assets in the Cooper Basin and Western Australia produced consistently, despite some weather-related disruptions.
The company also noted progress on cost control, with disciplined capital allocation remaining in place.
Guidance unchanged as outlook holds steady
Santos left its full-year guidance unchanged.
Production is expected to come in between 101 and 111 mmboe, with sales volumes in the same range.
Total capital expenditure is forecast at $1.9 billion to $2.1 billion, while unit production costs are expected to range from $6.95 to $7.45 per barrel of oil equivalent.
The company also confirmed it will host an investor day in late May.
Foolish takeaway
This looks like a business moving through the build phase and getting closer to bringing projects online.
Production has not yet increased, but the groundwork is in place with multiple developments nearing completion.
That is likely what the market is starting to price in.
Personally, I would be more interested in a pullback.
The long-term setup still looks solid, but after a 25% run this year, the easier gains may already be in.
