Santos (STO) Q2 2026 TU earnings summary

Executive summary

• Production reached 23.1 mmboe in Q2 2026, up 3% sequentially, with first-half output at 45.6 mmboe.

• Barossa project ramped to 97% of planned rates; Pikka phase 1 began production, targeting plateau in Q3 2026.

• Sales revenue rose 6% quarter-over-quarter to $1,349 million, driven by higher LNG and condensate pricing.

• Major project commissioning costs and timing of cargo receipts impacted first-half free cash flow, but significant uplift expected in H2 2026.

Financial highlights

• Q2 2026 sales revenue: $1,349 million (+6% QoQ); first-half revenue: $2,620 million (+2% YoY).

• Free cash flow from operations for H1: ~$378 million, impacted by one-off commissioning costs and cargo timing.

• Barossa and Pikka combined posted a free cash flow loss of ~$151 million in H1, including third-party cargo purchases.

• Realised LNG price: $11.21/mmBtu (+4.9% QoQ); crude oil price: $120.33/bbl (+58.6% QoQ).

• Capital expenditure in Q2: $481 million (+9% QoQ), but 20% lower YoY as major projects transition to operations.

Outlook and guidance

• Full-year 2026 production guidance narrowed to 99–105 mmboe.

• H2 2026 production expected to increase 20–30% over H1 as Barossa and Pikka reach plateau.

• Higher realised LNG pricing anticipated in H2, supported by JCC price rebound to over $100/bbl.

• Unit production costs expected to moderate in H2 as new projects stabilize.