Santos delivered its first-half results with two major production assets reaching operational milestones, marking a significant transition in the company’s cash generation profile. Pikka achieved first oil in May and lifted its first crude cargo in August, while Barossa produced seven cargoes in the first half and is ramping towards steady-state output of approximately 600 mmscf/d by quarter end. These new projects represent the company’s largest growth investments in over a decade, and their safe and timely commissioning reduces execution risk substantially.
The financial performance reflects this transition period. First-half production reached 45.6 million barrels of oil equivalent, up 3 per cent year-on-year, while sales revenue totalled $2.6 billion and EBITDAX came in at $1.6 billion. Net profit after tax was $355 million on a statutory basis, with underlying profit of $397 million. Free cash flow from operations of $378 million was modestly impacted by commissioning costs and cargo timing effects, particularly a 1.3 million barrel under-lift position in Papua New Guinea that Santos expects to reverse early in the second half.
The dividend decision reinforces management’s confidence in the outlook. Santos declared an interim dividend of US 11.6 cents per share unfranked, totalling $377 million, consistent with its capital allocation framework. This payout level reflects expectations for stronger full-year performance as the new projects move out of commissioning and into steady-state production. With gearing at 23.2 per cent (excluding operating leases), the company maintains meaningful financial flexibility while returning capital to shareholders.
Beyond production, Santos delivered exceptional operational metrics. The company recorded its best personal safety result on record with zero lost-time injuries and no Tier 1 process safety incidents. Moomba’s carbon capture and storage facility has sequestered 2.3 million tonnes of CO2 equivalent since start-up, demonstrating progress on its decarbonisation strategy. Darwin LNG achieved 100 per cent plant reliability in the first half, a critical metric for production consistency.
Investors should monitor several factors in the coming months. Second-half production is guided to be 20 to 30 per cent higher than the first half as Pikka builds towards its 80,000 barrels per day plateau and Barossa approaches full capacity. The normalisation of free cash flow as commissioning costs ease and cargo timing reverses will be closely watched. Additionally, the drilling program at Pikka is reportedly beating technical expectations, which could support cost discipline and accelerate project economics. Santos’ gearing should trend lower if cash generation meets expectations, providing further strategic optionality. This announcement is price sensitive information and has been flagged as material by the ASX.
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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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