Santos (ASX:STO) has been +1.1% higher in afternoon trade across the ASX’s Monday session after posting a strong first-half result for 2025, and a strong push on major growth projects, Barossa LNG and Pikka in Alaska.
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The energy giant reported free cash flow of US$1.1 billion, with sales revenue holding steady at US$2.6B and EBITDAX coming in at US$1.8B. Net profit was US$439million, while underlying profit landed at US$508M.
“[This] demonstrates the reliability of Santos to generate strong cash flow from operations, deliver major development projects successfully and provide competitive, reliable shareholder returns,” CEO Kevin Gallagher said, suggesting the results prove the strength of Santos’ low-cost model.
Production volumes came in at 44.1 million barrels of oil equivalent (mmboe), with sales volumes at 47.2 mmboe, both roughly flat year-on-year. But the Australian company benefited from solid demand and pricing, especially for LNG, where it achieved an average realised price of US$11.57 per mmbtu.
Shareholders will receive an interim dividend of US13.4cp, franked to 10%; up on last year and in line with the company’s policy to return 40% of free cash flow.
While the result was mostly upbeat, Santos did take a non-cash impairment of US$119 million related to exploration work in PNG.
Still, the big story is progress on its two major projects. Barossa LNG is now more than 98% complete, with first gas expected shortly. In Alaska, the Pikka Phase 1 development hit key milestones and is now targeting first oil in Q1 2026, earlier than previously expected.
“We’re accelerating first oil guidance for our Pikka Phase 1 project; it’s making strong progress,” Gallagher added.
Gearing stayed conservative at 23.7%, with liquidity at US$3.9 billion, giving Santos plenty of firepower to manage volatility and push ahead.
Add it all up, and Santos is keeping steady through the cycle, delivering cash, investing in growth, and positioning for a ~30% production boost by 2027. STO has been up 1.16% at $7.85 in afternoon trade.
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