Santos Limited has reported a robust 2025 full-year performance, marked by record safety achievements, strong free cash flow, and increased dividends, underscoring its disciplined low-cost operating model and strategic growth projects.
- Record personal and process safety performance
- Free cash flow of $1.8 billion and underlying NPAT of $898 million
- Final dividend declared at US 10.3 cents per share, total 23.7 cents for 2025
- Best unit production costs in a decade at $6.78 per barrel of oil equivalent
- Major projects Barossa and Darwin LNG delivered on time and budget
Strong Operational and Financial Results
Santos Limited has unveiled its full-year results for 2025, showcasing a resilient and efficient base business despite a challenging commodity price environment. The company reported an underlying net profit after tax of $898 million and generated a substantial free cash flow of $1.8 billion, reflecting the strength of its disciplined low-cost operating model.
Production volumes remained steady at 87.7 million barrels of oil equivalent (mmboe), with sales volumes slightly higher at 93.5 mmboe. Impressively, Santos achieved its best unit production costs in a decade, at $6.78 per boe excluding the Bayu Undan asset, underscoring its operational efficiency.
Safety and Emissions Milestones
The company recorded its best-ever personal safety performance and a ten-year best in process safety, with a 35% reduction in lost time injury rate and a 43% reduction in loss of containment incidents compared to 2024. These achievements place Santos in the top quartile globally for personal safety.
On the environmental front, Santos met its 2030 emissions reduction target five years ahead of schedule, largely driven by the Moomba Carbon Capture and Storage (CCS) project, which has stored over 1.5 million tonnes of CO2 equivalent since start-up. This milestone highlights Santos’ commitment to a credible decarbonisation pathway.
Dividend Growth and Capital Discipline
The Board declared a final dividend of US 10.3 cents per share, unfranked, bringing total dividends for 2025 to US 23.7 cents per share. This represents a 43% payout ratio of free cash flow from operations, reflecting a balance between rewarding shareholders and maintaining financial flexibility.
Santos also reported a gearing ratio of 21.5% excluding leases, demonstrating a strong balance sheet with ample liquidity of $4.3 billion. The company’s capital discipline is further evidenced by delivering major growth projects Barossa LNG and Darwin LNG within budget and ahead of schedule, without drawing on contingency funds.
Growth Projects and Outlook
Looking ahead, Santos is progressing the commissioning of Pikka phase 1, targeting first oil in early 2026 and ramp-up to full production by mid-year. The project’s drilling results are encouraging, supporting the targeted plateau production rate of approximately 80,000 barrels per day.
Guidance for 2026 remains unchanged, with expected production and sales volumes between 101 and 111 mmboe, capital expenditure forecast at $1.95 to $2.15 billion, and unit production costs anticipated between $6.95 and $7.45 per boe. The company plans a 10% headcount reduction to rightsize the business as growth projects transition into the base portfolio.
Strategic Positioning
Santos continues to position itself as a leading low-cost operator with a diversified portfolio of long-life assets, including LNG operations in Papua New Guinea and Australia, and oil and gas developments in Alaska. The company’s all-in break-even oil price target of $45-$50 per barrel through to 2030 supports sustainable shareholder returns and value-accretive growth.
Managing Director Kevin Gallagher emphasised the company’s disciplined approach, stating that strong free cash flow from the base business has funded growth projects and dividend increases, while gearing remains low. Santos is now poised to pursue additional opportunities with financial flexibility, underpinning its commitment to shareholder value and operational excellence.
Bottom Line?
Santos’ 2025 results reinforce its disciplined model and growth trajectory, but investors will watch closely how the company manages costs and execution as it scales up new projects in 2026.
Questions in the middle?
- How will the planned 10% headcount reduction impact operational efficiency and project delivery?
- What are the risks to Santos’ emissions reduction targets amid evolving regulatory and market conditions?
- How will commodity price volatility affect Santos’ free cash flow and dividend policy in the near term?