Santos Limited has reported steady operational performance in the first quarter of 2026, with production reaching 22.5 million barrels of oil equivalent, up 1 percent from the prior quarter and 3 percent year-on-year. The company delivered sales revenue of approximately $1.27 billion, up 3 percent sequentially, while maintaining free cash flow from operations at around $383 million. These results reflect disciplined execution across the company’s portfolio, though the lack of material acceleration suggests Santos is navigating a stable but not exceptional operating environment.
The standout development in this quarter is the Barossa LNG facility’s achievement of first cargoes, marking a significant milestone for Santos’ global LNG production. Barossa is now expected to ramp up production following completion of heat exchanger maintenance and replacement of dry gas compressor seals. This expansion represents a meaningful boost to Santos’ cash generation capability, as the facility enters the critical ramp-up phase that will determine its contribution to full-year earnings and free cash flow.
In Alaska, Santos achieved a notable exploration success with the Quokka-1 appraisal well, which confirmed a high-quality Nanushuk reservoir with approximately 143 feet of net oil pay and demonstrated a flow rate of 2,190 barrels per day following stimulation. The well correlates closely with the Mitquq-1 discovery well, and fluid analyses confirm high-quality, light-gravity oil that commands improved pricing relative to other Pikka production. This result strengthens the development runway in Alaska and suggests Santos has identified material additional resource that could support future production growth beyond the initial Pikka phase 1 production profile.
The Pikka phase 1 development continues progressing toward commercial production, with mechanical completion achieved early in the quarter and oil initiation underway for facility fill activities. First sales oil into the pipeline network is expected in the coming weeks, with full ramp-up toward plateau production anticipated throughout the second and third quarters as the Seawater Treatment Plant commences operations. The successful drilling and stimulation of 27 development wells, with 20 wells performing in line with pre-drill expectations, indicates the field is developing as planned.
Santos also announced a final investment decision on the Moomba Central Optimisation project, targeting over $600 million in net capital and operating cost savings over the life of the Central Fields. The project is expected to generate an internal rate of return exceeding 15 percent, reflecting Santos’ disciplined approach to high-return growth investments in its mature asset base.
Notably, the company maintained unchanged full-year 2026 guidance despite these operational milestones, suggesting management has incorporated current expectations into previously provided targets. Investors should monitor Barossa’s ramp-up trajectory, Pikka phase 1’s progression toward plateau production, and the timing of sustained cash flow acceleration from these new production sources. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Santos Limited (ASX: STO)
Santos Limited is a major Australian oil and gas producer operating across Australia, Papua New Guinea, and other Asia-Pacific locations. It is a significant supplier of natural gas to the domestic and export markets.
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