(WO) — Santos expects second-half 2026 production to increase 20%–30% from first-half levels as its Pikka oil development in Alaska and Barossa gas project offshore Australia continue to ramp up.
Image: Santos Ltd.
Santos produced 45.6 MMboe during the first half, up 3% from the same period last year. The company reported sales revenue of $2.6 billion and EBITDAX of $1.6 billion.
Pikka achieved first oil in May and moved to continuous production in June, followed by the first crude cargo lifting in August. Santos expects production to build toward the project’s 80,000-bpd gross plateau late in the third quarter.
CEO Kevin Gallagher said drilling at Pikka is also exceeding technical targets, reducing the time and cost required to drill wells.
“The first half marked an important step forward for Santos,” Gallagher said. “We brought the Pikka project online safely and continued to progress Barossa through commissioning towards steady-state production, while the base business continued to perform strongly.”
At Barossa, production has reached approximately 550 MMcfd and is expected to increase to around 600 MMcfd by the end of the third quarter. The project delivered seven LNG cargoes through the end of June and another five since July 1. At steady-state production, Santos expects a cargo approximately every eight days from Darwin LNG.
With peak capital spending on Pikka and Barossa now behind it, Santos expects the production ramp-up to support stronger free cash flow during the second half.
The company is also advancing Papua LNG toward a targeted final investment decision in the fourth quarter of 2026. Santos said project financing is progressing, with at least 60% of the development targeted to be funded through project financing facilities.
In Australia’s Cooper basin, Santos has taken FID on the Moomba Central Optimization project, which targets more than $600 million in capital and operating cost savings over the life of the Central Fields and a reduction of up to $3/bbl in unit production costs.
Santos generated $378 million in free cash flow from operations during the first half. The company said commissioning activity at Pikka and Barossa, cargo timing and a roughly 1.3-MMboe PNG under-lift weighed on the result, with those impacts expected to unwind during the second half.
Top image: The Pikka oil development in Alaska. Image: Repsol.
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