Santos (ASX: STO) Quarterly Report illustrates that the Company operated very well and used capital prudently during the fourth quarter of 2025. The update reiterates the character of Santos as a tenacious international energy producer, although the commodity pricing was softer across the markets worldwide.
Free cash flow from operations was close to $380 million for the quarter, which is a 30 per cent increase compared to the previous quarter. The total free cash flow for the year was estimated at around $1.8 billion, and it was made possible through strong production and strict cost control measures.
The production volume for the fourth quarter of 2025 was 22.3 mmboe, which was a five per cent increase from the previous quarter, while the total production for the year was 87.7 mmboe.
Furthermore, sales went up to 24.8 mmboe, which is a 15 per cent rise from the previous quarter and a total of 93.5 mmboe for the year. Sales revenue exceeded $1.2 billion for the quarter and over $4.9 billion for the whole year. Santos kept its production costs at less than $7 per barrel, thus reinforcing its low-cost operating model.
Santos delivered strong operations and disciplined capital management. [Capital Brief]
How Did Santos Quarterly Report Strengthen Cash Flow?
The Santos Quarterly Report states that coherent execution throughout the portfolio led to strong cash generation. The free cash flow breakeven price went below $30 per barrel for the entire year, thus giving the Company a strong position in case of market volatility.
The corporate borrowing ratio went down to 26.8 per cent, which is also 21.5 per cent if operating leases are not taken into account, which is a sign of better balance sheet strength. Santos issued a senior unsecured fixed-rate bond of $1 billion at 5.75 per cent, which improved its long-term financial flexibility.
The sale of the 42.86 per cent stake in the Mahalo Gas Project for A$40 million up-front consideration is one of the non-core asset divestitures that also increased the Company’s liquidity. The Company will still be able to receive an additional A$20 million linked to production milestones as contingent payments.
Barossa LNG Delivers First Cargo Milestone
Barossa LNG has achieved a wonderful milestone that is marked by the first LNG cargo beginning to load after commissioning activities. There were gas export volumes of about 450 mmscf per day, which is about 75 per cent of the overall plant capacity. The entire six wells showed very good reservoir quality with the average individual well potential deliverability of about 300 mmscf per day. LNG production started right after the completion of the Darwin LNG life extension project. The first shipment is going to the Sakai terminal in Japan on a delivered ex-ship basis. This milestone, hence, puts Santos in a good position to ramp up production, and in this way, the Asia-Pacific region will be more reliable in terms of exports.
Barossa LNG achieved its first cargo milestone and strong export volumes. [LinkedIn]
Is Pikka Phase 1 Positioned For Early Production?
Pikka phase 1 is nearly finished, with 98 per cent of the work done, while commissioning activities are moving ahead without delays. So far, shallower wells were drilled and completed, with the 23rd one producing an initial rate of around 8,000 bbl per day.
Santos‘ share of the capital expenditure went up by about $200 million, which is less than 10 per cent of the total project costs. The project is still on course for the first oil in late 2026, with the plateau production expected in the middle of the same year.
Once fully operational, Barossa LNG and Pikka phase 1 are forecasted to together contribute a hike in production of approximately 25 to 30 per cent by 2027, as compared to 2024 levels.
Operational Excellence Drives Portfolio Stability
The performance of the assets in Western Australia, Cooper Basin, PNG, and Queensland continued to be strong. The production of gas for domestic use in Western Australia increased by about 19 per cent as a result of the recovery from the planned shutdowns.
PNG LNG operated at a very high reliability level of above 98 per cent while the Hides F2 well was producing an average of 60 mmscf per day during its initial production. GLNG had a total annual LNG production of 6 Mt, which was made possible by the record daily production at the Roma and Scotia fields.
The Moomba CCS project has been very effective in capturing and storing CO2e emissions, with a total of over 1.5 Mt stored since the project started and 907,872 Australian Carbon Credit Units granted during the period.
Strong asset performance boosted gas production across key regions. [Investopedia]
What do Santos’ Q4 2025 Results Mean For Investors?
Santos Q4 2025 Results are a reflection of the consistent execution, improved balance sheet strength, and visible production growth pathways. The Company continues to demonstrate capital discipline with the investment in sustaining and growth aligned to long-term returns.
The 2026 guidance indicates production volumes between 101 and 111 mmboe and a total capital expenditure of approximately $1.95 to $2.15 billion. The production costs per unit are expected to be between $6.95 and $7.45 per boe.
The Company’s ability to generate stable cash flow and its expanding LNG exposure, along with the decarbonization initiatives that are in place throughout the portfolio, are the factors that continue to support investor confidence.
Also read:Â Santos Clears PNG LNG Debt Six Months Early: A Strategic Win Ahead of Major Projects
FAQs
Q1: What is the focus of the Santos Quarterly Report?
A1: The report highlights production growth, cash flow strength, and major project milestones across Santos’ global portfolio.
Q2: How did Santos perform financially in Q4 2025?
A2: Free cash flow reached approximately $380 million while sales revenue exceeded $1.2 billion for the quarter.
Q3: When will Pikka phase 1 begin production?
A3: First oil is expected late in the first quarter of 2026, with plateau production anticipated mid-year.
Q4: What growth drivers support Santos’ outlook?
A4: Barossa LNG commissioning, Pikka development, stable LNG exports, and disciplined capital management drive future growth.
