Santos Delivers Strong Cash Flow as Barossa LNG Ships First Cargo
Australia’s Santos has capped off 2025 with strong base business performance, resilient cash generation, and major growth projects moving into production, underscoring the company’s ability to deliver through a period of softer commodity prices.
The company generated around $380 million in free cash flow from operations in the fourth quarter, lifting full-year free cash flow to approximately $1.8 billion. Santos said its free cash flow breakeven price was below $30 per barrel for the full year, highlighting the strength of its low-cost operating model. Full-year sales revenue exceeded $4.9 billion, supported by higher sales volumes and improved marketing outcomes.
Production for the fourth quarter rose 5 percent quarter-on-quarter to 22.3 million barrels of oil equivalent (mmboe), with full-year output reaching 87.7 mmboe. Sales volumes increased more sharply, up 15 percent in the quarter to 24.8 mmboe, reflecting timing effects and portfolio flexibility. Unit production costs for the year came in below $7 per boe, excluding Bayu Undan, and within guidance.
The standout operational milestone was the commencement of LNG production at Barossa, with Santos confirming that the first LNG cargo is now being loaded at the Darwin LNG facility for delivery to Japan on a delivered ex-ship basis. The BW Opal FPSO is ramping up gas exports at around 450 million cubic feet per day, roughly 75 percent of nameplate capacity. All six Barossa wells have been drilled, tested, and have demonstrated strong reservoir quality, with individual well deliverability estimated at around 300 million cubic feet per day.
Barossa’s start-up follows completion of the Darwin LNG life extension project, which was required to keep the plant operating into the next decade. While commissioning was delayed by around two months due to repairs to GRE pipework systems, Santos said the additional work was undertaken to ensure long-term reliability rather than accelerate short-term volumes.
In Alaska, Santos’ Pikka Phase 1 oil development is nearing mechanical completion at 98 percent, with first oil targeted for late in the first quarter of 2026. Drilling performance has been strong, with the best-performing well to date flowing at about 8,000 barrels per day. The company disclosed a roughly $200 million increase in its share of Pikka Phase 1 capital expenditure, driven by inflation, tariffs, and logistics costs, but said the increase was offset elsewhere in the portfolio, keeping 2025 capex at the low end of guidance.
Across the broader portfolio, Santos reported operational improvements in Papua New Guinea, Western Australia, the Cooper Basin, and Queensland’s LNG-linked gas assets. PNG’s Hides F2 well was brought online ahead of schedule, while Western Australia domestic gas output rebounded following major maintenance shutdowns earlier in the year. In the Cooper Basin, production recovered to pre-flood levels after severe weather disruptions, with drilling activity maintained throughout the year.
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