August 20, 2026 [Storage Terminals Magazine]- Santos has reported a solid first-half performance for 2026, with the company entering a significant period of transition as the Pikka project commenced production and the Barossa project progressed through commissioning and ramp-up.

The Australian energy company recorded first-half production of 45.6 million barrels of oil equivalent (mmboe), representing a 3 percent increase compared with the corresponding period in 2025.

Santos reported $2.6 billion in sales revenue, $1.6 billion in EBITDAX and $378 million in free cash flow from operations for the six months.

Pikka and Barossa drive growth

The first-half results were supported by strong performance from Santos’ base business, alongside the commencement of production at Pikka and continued development of Barossa.

Pikka achieved first oil in May, moved into continuous production in June and recently delivered its first crude oil cargo. Production is expected to increase towards a gross plateau of approximately 80,000 barrels per day late in the third quarter.

Santos said its Pikka drilling programme has also been consistently outperforming technical limits, helping to reduce both drilling times and well costs.

At Barossa, commissioning is progressing towards steady-state production. Current output is around 550 million standard cubic feet per day (mmscf/d) and is expected to increase to approximately 600 mmscf/d by the end of the quarter.

At steady-state production, Barossa is currently expected to support a cargo approximately every eight days. Meanwhile, Darwin LNG achieved 100 percent plant reliability during the first half.

Free cash flow impacted by project commissioning

Santos said its first-half free cash flow was affected by commissioning activities at both Barossa and Pikka, the timing of cargo movements around 30th June and a Papua New Guinea under-lift position of approximately 1.3 million boe.

The company expects these effects to unwind during the early part of the second half as production increases and the PNG under-lift position is reversed.

With major development construction and peak capital expenditure for Barossa and Pikka now behind the company, Santos expects second-half production to be approximately 20 percent to 30 percent higher than first-half levels.

The company expects the increase in production to support stronger free cash flow and shareholder returns.

Interim dividend announced

Santos’ Board has approved an interim dividend of US11.6 cents per share, in line with the company’s capital allocation framework and reflecting its expectations for full-year performance.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the company was entering the second half of the year from a stronger operating position following progress across its major projects.

He highlighted the safe start-up of Pikka and the continued commissioning of Barossa, while noting the strong contribution from Santos’ base business.

Papua LNG remains a key priority

Santos is also continuing to progress the Papua LNG project, with a final investment decision targeted for the fourth quarter of 2026.

Project financing is advancing, with Santos targeting at least 60 percent of the project to be funded through project financing facilities.

The company said strong performance from its base business and continued capital discipline are helping to fund investment in future low-cost, high-margin production opportunities.

Investment in Cooper Basin infrastructure

Santos has also taken a final investment decision on the Moomba Central Optimisation project, which is expected to target more than $600 million in capital and operating cost savings over the life of the Central Fields.

The project is also targeting a reduction of up to $3 per barrel in Cooper Basin unit production costs.

Investment in the project is being supported by a prepayment under a gas sales agreement covering the supply of 200 petajoules of domestic gas to the South Australian Strategic Gas Reserve between 2030 and 2040.

The initiative forms part of Santos’ strategy of investing in high-return opportunities around infrastructure it already owns and operates.

Strong liquidity supports future growth

Santos ended the first half with $3.8 billion in liquidity and no debt maturities before September 2027.

According to Gallagher, the company’s balance sheet is positioned to support disciplined investment in future production growth while maintaining its target of reducing net debt by $2.5 billion by 2030.

The company is therefore entering the second half of 2026 with increased production expected from Pikka and Barossa, while continuing to advance Papua LNG and optimise its existing Australian infrastructure.

Santos also hosted a live webcast covering its half-year results, with Gallagher joined by Chief Financial Officer Lachlan Harris and Chief Operating Officer Australia and PNG Upstream Oil and Gas Brett Darley for a question-and-answer session.