Santos Posts $1.3B Sales Revenue for Q1

Santos Ltd. has reported $1.29 billion in sales revenue for the first quarter (Q1), down 8 percent from the prior three-month period as lower natural gas prices offset an increase in gas sales volumes.

The Australian oil and gas exploration and production company saw free cash flow from operations increase 9 percent quarter-on-quarter to about $465 million.

“The business remains strong and resilient, maintaining free cash flow from operations breakeven oil price less than US$35 per barrel in 2025”, managing director and chief executive Kevin Gallagher said in a statement.

“Our LNG contract portfolio provides flexibility and positions Santos to capitalize on emerging market opportunities amid ongoing volatility”, Gallagher added.

Santos sold 1.36 million metric tons of liquefied natural gas (LNG) in the January-March period. Its domestic gas sales totaled 45.8 petajoules.

Petroleum and condensate sales fell sequentially to 1.26 million barrels and 1.14 million barrels respectively. Liquefied petroleum gas sales also decreased to 7.8 million metric tons.

Total Q1 sales volumes were lower than Q4 2024 with no crude lifting from Western Australia’s Pyrenees oilfields and lower third-party purchases, Santos said.

Meanwhile production grew 2 percent quarter-on-quarter to 21.9 million barrels of oil equivalent (MMboe). Papua New Guinea contributed 10 MMboe, Western Australia 5.1 MMboe, Queensland and New South Wales 3.5 MMboe, Cooper Basin 3.1 MMboe and Northern Australia and Timor-Leste 200,000 boe.

Western Australian production grew over 18 percent driven by the Halyard-2 infill well, which maintains production in the offshore Greater East Spar field as Halyard-1 has been depleted. Halyard-2 is targeted to send an incremental 65 million standard cubic feet a day of gas to Valarus Island for processing via an existing pipeline. Halyard-2 started up in Q1.

Santos’ realized gas prices dropped quarter-on-quarter to $11.57 per million British thermal units (MMBtu) for LNG and $5.93 per gigajoule for domestic gas. However, the Japan-Korea Marker-indexed portion of its LNG sales rose to $14.12 per MMBtu; the oil-indexed portion dipped to $11.04 per MMBtu. Liquid prices climbed.

Santos said the Barossa field development was 95.2 percent at the end of Q1, on track to start production in Q3. Barossa will provide a new source for Darwin LNG in the Northern Territory, extending the liquefaction facility’s life for about 20 years.

In another project, phase 1 of the Pikka oilfield development in Alaska reached 82.2 percent completion. “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”, Santos said. The first phase targets reservoirs with estimated proven and probable reserves of 397 million barrels gross (165 million barrels for Santos).

“Our development projects are nearing completion within cost and schedule guidance”, Gallagher said. “When the Barossa and Pikka projects come online, production is expected to increase by more than 30 percent by 2027. 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 percent of all-in free cash flow to shareholders, and up to 100 percent when gearing falls below our target range”.

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