The Santos Ltd (ASX: STO) share price is in focus today after the company delivered record third-quarter production of 26.3 million barrels of oil equivalent (mmboe), up 14% on the prior quarter, and reported sales revenue of US$2,006 million, a 49% jump.
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What did Santos report?
- Record quarterly production of 26.3 mmboe, up 23% on the prior corresponding period
- Sales revenue of US$2,006 million for the quarter, up 49% on Q2 2026
- Record free cash flow from operations of ~US$1,069 million
- Barossa project achieved steady production; Darwin LNG operated at 98.5% reliability
- Pikka oil production ramped up, with first oil cargo lifted in August
- Year-to-date production at 71.9 mmboe, up nearly 10% year-on-year
What else do investors need to know?
Santos continued its disciplined development strategy, acquiring an additional 3.3% interest in the Papua LNG project, increasing its stake to 21% (post State back-in), with completion subject to regulatory approvals and project FID planned for the fourth quarter.
The company made progress across its asset base: Barossa reached steady-state production, Pikka's ramp-up continued despite temporary curtailments, and Moomba CCS has now safely stored over 2.5 million tonnes of CO2e. Santos also completed the divestment of its stake in the Mahalo joint venture and agreed on long-term LNG supply arrangements with POSCO Steel and Western LNG.
Guidance for full-year 2026 production has been narrowed to 99–102 mmboe, reflecting slightly slower ramp-up at Pikka due to weather impacts and a pipeline event.
What did Santos management say?
Santos Managing Director and CEO Kevin Gallagher said:
Production of 26.3 mmboe was up almost 14 per cent on the June quarter and 23 per cent on the September quarter last year. That is the growth we said would follow as Barossa and Pikka came online. The inflection point is here, and I expect more to come in the fourth quarter as Barossa continues its journey to high reliability and Pikka gets a full quarter online. … Our focus now is running the business well: keeping Barossa and Pikka at steady production, progressing Papua LNG towards planned FID in the fourth quarter, and holding to our disciplined low-cost operating model.
What's next for Santos?
Looking ahead, Santos aims to maintain steady operations at Barossa and Pikka while progressing Papua LNG toward a final investment decision in late 2026. The company remains committed to disciplined cost management and sustaining a robust free cash flow position, with capital allocation targeted at growth and low-cost operations.
Santos is also advancing its Greater Meridian coal seam gas acquisition in Queensland, expanding its footprint and future production base, and is pursuing new long-term LNG agreements to strengthen its global portfolio.
Santos share price snapshot
Over the past 12 months, Santos shares have risen 48%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.
