Santos Delivers Strong Cash Flow as Barossa LNG Ships First Cargo

Core Viewpoint - Santos has demonstrated strong operational performance and cash generation in 2025, successfully navigating a period of lower commodity prices while advancing major growth projects into production [1] Financial Performance - The company generated approximately $380 million in free cash flow during Q4, bringing the total free cash flow for the year to around $1.8 billion, with a breakeven price below $30 per barrel [2] - Full-year sales revenue surpassed $4.9 billion, driven by increased sales volumes and improved marketing outcomes [2] Production and Sales - Q4 production increased by 5% quarter-on-quarter to 22.3 million barrels of oil equivalent (mmboe), with total annual output reaching 87.7 mmboe [3] - Sales volumes rose significantly, up 15% in Q4 to 24.8 mmboe, reflecting timing effects and portfolio flexibility [3] - Unit production costs for the year were below $7 per barrel of oil equivalent (boe), excluding Bayu Undan, and within guidance [3] Operational Milestones - The commencement of LNG production at Barossa is a key operational milestone, with the first LNG cargo being loaded for delivery to Japan [4] - The BW Opal FPSO is ramping up gas exports at approximately 450 million cubic feet per day, achieving about 75% of its nameplate capacity [4] - All six Barossa wells have been drilled and tested, showing strong reservoir quality with individual well deliverability estimated at around 300 million cubic feet per day [4] Project Developments - The start-up of Barossa follows the completion of the Darwin LNG life extension project, ensuring the plant's operation into the next decade despite a two-month commissioning delay due to repairs [5] - In Alaska, the Pikka Phase 1 oil development is nearing mechanical completion at 98%, with first oil expected in late Q1 2026 [6] - The company reported a $200 million increase in its share of Pikka Phase 1 capital expenditure due to inflation and logistics costs, but this was offset elsewhere in the portfolio, keeping 2025 capex at the low end of guidance [6] Operational Improvements - Santos reported operational enhancements across its portfolio, including Papua New Guinea, Western Australia, the Cooper Basin, and Queensland's LNG-linked gas assets [7] - The Hides F2 well in PNG was brought online ahead of schedule, and domestic gas output in Western Australia rebounded after maintenance shutdowns [7] - Production in the Cooper Basin recovered to pre-flood levels following severe weather disruptions, with consistent drilling activity maintained throughout the year [7]