Santos Ltd on Wednesday reported around $2 billion in third-quarter (Q3) sales revenue, up 49 percent from the prior three-month period as sales volumes increased 11 percent to 26.4 million barrels of oil equivalent (MMboe).
Average realized prices also rose for both liquefied natural gas (LNG) and domestic gas to $16.22 per million British thermal units (MMBtu) and $6.61 per gigajoule. Average realized liquids prices declined, with oil averaging $96.66 per barrel.
LNG sales totaled 1.6 million metric tons, compared to 1.53 million metric tons in Q2. Sales gas and ethane totaled 44.2 petajoules. Crude, condensate and liquefied petroleum gas sales totaled 1.37 million barrels, 2.14 million barrels and 11,800 metric tons respectively.
Production increased nearly 14 percent sequentially to 26.3 MMboe, a quarterly record for the company.
“Barossa achieved steady production during the third quarter with Darwin LNG operating at 98.5 per cent reliability, with 10 LNG cargoes and two condensate cargoes lifted”, Santos said in an online statement.
Barossa, in Northern Territory waters, is designed to extend the life of the Darwin liquefaction plant, which stopped receiving feed gas from Timor-Leste’s Bayu-Undan field in 2023 due to depletion. Barossa’s floating production, storage and offloading vessel has a gas handling capacity of 850 million cubic feet a day, according to Santos.
“Pikka oil production briefly reached minimum expected plateau rate before the end of the third quarter”, Santos added. “Production was temporarily curtailed on two occasions after a weather event affected the Seawater Treatment Plant, which was still in its start-up phase, and when the operator of the Kuparuk pipeline shut down following a road accident that impacted the pipeline. Production is planned to be held at around 70,000 barrels per day for a short period of time to allow water injection to replenish reservoir voidage, as part of a disciplined reservoir management plan”.
The Pikka oil development on Alaska’s North Slope is expected to produce up to 80,000 barrels per day gross.
Santos has now further narrowed its projected production for 2026 to 99-102 MMboe from 99-105 MMboe.
Managing director and chief executive Kevin Gallagher said “reliability [at PNG LNG and Darwin LNG], together with our disciplined low-cost operating model, drove record free cash flow from operations of approximately $1,069 million and free cash flow of approximately $957 million”.
“With Barossa and Pikka online, we are a larger, more diversified, higher-margin business with a strong pipeline of backfill and growth options”, Gallagher added. “Our focus now is running the business well: keeping Barossa and Pikka at steady production, progressing Papua LNG towards planned FID in the fourth quarter and holding to our disciplined low-cost operating model.
“As part of our disciplined low-cost operating model we remain committed to our capital allocation framework, delivering disciplined growth within a $45-50 per barrel free cash flow breakeven, targeting less than $50 per barrel in 2026”.