Santos Q1 Revenue Up YoY

Santos Ltd on Thursday reported $1.27 billion in sales revenue for the first quarter (Q1), up 3 percent from the prior three-month period thanks to higher liquefied natural gas (LNG) and crude oil volumes.

The Australian gas-focused producer totaled 22.5 million barrels of oil equivalent (MMboe) in production in the January-March 2026 quarter, up 1 percent from Q4 2025.

Total sales volume fell 2 percent to 24.2 MMboe due to a decline in own-product sales, from 22.7 MMboe in Q4 2025 to 20 MMboe in Q1 2026. Third-party sales increased from 2.1 MMboe to 4.2 MMboe.

"First quarter sales of own production were lower than the prior quarter due to lower sales from Varanus Island as a result of cyclone activity and lower LNG and liquids sales from PNG [Papua New Guinea] due to cargo lifting timing", Santos said in an online statement.

"This was offset by two equity cargoes from Barossa production [in Australia's Northern Territory], an additional Pyrenees crude oil lifting and incremental crude sales from the Cooper Basin.

"The Cooper Basin sales were brought forward by around a month to support Australia's fuel security and assist domestic refiners during this period of heightened global uncertainty.

"Third-party sales were higher during the quarter as Santos sought to extract value from optionality in mid- and long-term contracts, purchasing four LNG cargoes. This activity also assisted in commissioning activities and helped mitigate production delays at Barossa. This was offset by lower third-party purchases from GLNG as some legacy domestic gas agreements expired and have not been renewed".

Barossa, a life extension project for Darwin LNG, shipped its first cargo early this year but has encountered "challenges" during commissioning, according to Santos.

The project involves the development of the Barossa field as a new source for the liquefaction plant in Darwin, which began producing LNG 2006 and has an LNG capacity of about 3.7 million metric tons a year, according to Santos.

"The Barossa floating storage and offloading facility (FPSO) is expected to commence ramping up production in the next week as we complete the flushing and cleaning of heat exchanger trains", Santos said Thursday. "During this recent shutdown the dry gas compressor seals have been replaced to allow full production rates once the facility is back online. LNG production is expected to commence a few days after the FPSO is online".

Q1 2026 LNG sales totaled 1.5 million metric tons, compared to 1.44 million metric tons in Q4 2025. Besides higher volumes, higher JKM-indexed LNG prices increased LNG revenue to $843 million.

Domestic gas sales, however, dropped quarter-on-quarter to 43 petajoules from 48.6 petajoules in volume and to $243 million from $268 million in revenue. Santos' average realized domestic gas price increased.

Crude sales increased to 1.32 million barrels from 991,000 barrels in volume and to $100 million from $66 million in revenue. Realized oil prices increased.

Santos maintained its production and sales guidance at 101-111 MMboe for 2026.

"As Barossa ramps up and Pikka phase 1 comes online, Santos is well positioned to deliver production growth within the $45 to 50 per barrel all-in free cash flow breakeven target range for the business", said managing director and chief executive Kevin Gallagher.

To contact the author, email jov.onsat@rigzone.com