Santos Ltd (ASX: STO) shares are edging lower today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $8.31. In morning trade on Thursday, shares are changing hands for $8.29 apiece, down 0.2%.
For some context, the ASX 200 is just about flat at this same time, while the S&P/ASX 200 Energy Index (ASX: XEJ) is down 1.2%.
Now, here's what's happening with Santos' growth outlook.
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Santos shares in focus amid major project progress
In news that could support Santos shares over the longer term, the company announced a "significant milestone" at its Pikka oil project, located on Alaska's North Slope.
Pikka is one of Santos' two major growth projects that could help the ASX 200 oil and gas stock increase its production by up to 30% in the second half of the year (H2 2026) compared to H1.
And Pikka is fast progressing to full production, with Santos reporting the successful commencement of seawater injection at the Nanushuk Drillsite-B (NDB) within the project.
Continuous production at Pikka commenced in June.
The project is now delivering around 40,000 barrels of oil per day (gross). And Santos shares could catch further tailwinds, with management reporting the company plans to bring additional wells online over the coming weeks, now that the water injection is also online.
The company said that water export from the seawater treatment plant began on 18 August via a 75-kilometre seawater pipeline that connects the Beaufort Sea to the Pikka project site.
With injection into the reservoir having started on 26 August, Santos said the water injection milestone testing has since been successfully completed. The current water injection was reported to be around 40,000 barrels per day.
Why is Santos injecting seawater?
The company explained:
Seawater injection provides pressure support to the reservoir, a key enabler of the production ramp-up targeting plateau production of approximately 80,000 barrels of oil per day (gross) at the end of the third quarter of 2026.
What did management say?
Commenting on the progress at Pikka that could provide long-term support for Santos shares, managing director and CEO Kevin Gallagher said:
Seawater injection is a critical step in unlocking Pikka's production capacity. With pressure support now established and wells coming online progressively, we continue to target plateau production rates at the end of the third quarter of 2026.
Pikka is a world-class asset and seawater injection, together with continued efficient drilling and operations, keeps us firmly on track to deliver its full potential.
Santos share price snapshot
With today's intraday moves factored in, shares in the ASX 200 energy stock are up 34.8% in 2026, well ahead of the 2.9% year-to-date gains posted by the benchmark index.
