Santos (STO) H1 2026 earnings summary

Executive summary

• Achieved record safety performance with zero lost-time injuries and no Tier 1 process safety incidents in 1H 2026, maintaining a safety record better than the IOGP global average since 2022.

• First oil from Pikka and first LNG cargoes from Barossa delivered, marking a transition year with major project ramp-ups and strong base business performance.

• Production volumes reached 45.6 mmboe, up 3.4% year-over-year, with significant contributions from new and existing assets.

• Interim dividend of US 11.6 cents per share declared, totaling $377 million, reflecting confidence in the full-year outlook.

• Net profit after tax was $355 million, with underlying profit at $397 million, impacted by higher depletion and commissioning costs.

Financial highlights

• Sales revenue reached $2.62 billion, EBITDAX was $1.6 billion, and free cash flow from operations was $378 million for the first half.

• Unit production cost was $7.53/boe, and gearing stood at 28.1% including leases (23.2% excluding).

• EBITDAX margin was 59%, and LNG realized $10.95/MMBtu, crude oil $92/bbl.

• Free cash flow was impacted by commissioning costs, cargo timing, and PNG LNG underlift, with $300 million in proceeds received post-period end.

• Interim dividend of US 11.6 cents per share declared, a 13% decrease from the prior year.

Outlook and guidance

• Full-year 2026 production guidance: 99–105 mmboe; sales volumes: 102–108 mmboe.

• Second-half production expected to be 20–30% higher as Barossa and Pikka ramp up, supporting stronger cash generation and shareholder returns.

• Free cash flow breakeven targeted at $45–$50/bbl through 2030, with sensitivity to oil price improving as new production reaches plateau.

• Unit production cost guidance is $6.95–$7.45/boe; capex guidance is ~$1.95–$2.15 billion.

• Papua LNG project targeting FID in Q4 2026, with at least 60% project financing.