Santos Limited kept its 2026 outlook unchanged after a stable first quarter, marked by progress on two key projects: Barossa, focused on liquefied natural gas, and Pikka Phase 1, which is approaching its first oil production in Alaska.
In addition, the Australian company reported quarterly production of 22.5 million barrels of oil equivalent, slightly higher than the previous quarter and the same period last year. Sales revenue reached $1.27 billion, while operating free cash flow stood at around $383 million.
Barossa prepares to increase its LNG production
On the one hand, Santos is moving forward with the full start-up of the Barossa LNG project, considered a key element in sustaining supply to Asian markets. After technical adjustments during the commissioning phase, including the replacement of compressor seals, the floating production facility is preparing to restart operations and increase capacity.
In this way, Barossa is set to become a new pillar of Santos’ integrated LNG chain, especially due to its link to Darwin LNG. The company expects the project to help offset declining supply from mature assets and provide greater stability to its export portfolio.
Likewise, the context of LNG demand in Asia remains a favorable factor for the company. Although international prices have come under pressure in some markets, Santos seeks to balance that environment with higher volumes, operational efficiency, and contracts linked to long-term markets.
Pikka approaches first oil in Alaska
On the other hand, the Pikka Phase 1 project has already reached mechanical completion and entered the start-up phase. Santos expects first oil within weeks, with a gradual ramp-up in production until it reaches peak levels in the third quarter of 2026.
This development strengthens Santos’ presence in liquids and provides geographic diversification beyond its core gas assets in Australia and Papua New Guinea. For the company, Pikka also represents a source of production with potentially higher margins, at a time when capital discipline remains a priority.
In addition, the evaluation of the Quokka-1 well in Alaska confirmed the quality of the Nanushuk reservoir. That result strengthens long-term potential on the North Slope and expands growth options around the infrastructure Santos is already developing in the area.
2026 guidance unchanged despite technical adjustments
Meanwhile, Santos is maintaining its annual production and cost guidance for 2026, even with the normal start-up challenges at Barossa. The decision reflects confidence in its ability to execute its projects and in the stability of its operating base.
The company also highlighted its focus on disciplined capital allocation. Rather than concentrating solely on new greenfield developments, Santos is seeking to extract additional value from existing assets, optimize infrastructure, and maintain a financial structure capable of sustaining cash flow.
In Australia, that strategy is reflected in the 10-year supply agreement for 200 petajoules with the Government of South Australia. The contract supports local energy security and is linked to the Moomba optimization project, which is expected to deliver savings of more than $600 million over its life cycle.
Moomba strengthens the domestic gas strategy
In addition, the final investment decision on the Moomba Central optimization project confirms Santos’ interest in improving the efficiency of its existing infrastructure. These types of initiatives increase value without relying exclusively on high-risk expansions or longer investment cycles.
In turn, domestic gas supply remains strategically important for Australia. Santos pointed to its role in stabilizing supply during recent disruptions in the global market, demonstrating a stronger connection between its commercial operations and energy security priorities.
With Barossa and Pikka advancing in parallel, the company is entering a decisive phase. The start-up of both projects will define the pace of short-term production growth and test Santos’ ability to convert a broad portfolio into sustained cash generation.
Source: Santos Barossa
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