Santos Narrows 2026 Output Guidance as Barossa and Pikka Ramp Up
Santos Narrows 2026 Output Guidance as Barossa and Pikka Ramp Up.
Santos narrowed its full-year production guidance after its Barossa LNG project and Alaska's Pikka oil development advanced through commissioning, with the company expecting a significant increase in production and free cash flow during the second half of 2026.
The Australian energy producer said Barossa is now operating at 97% of planned production rates, with LNG cargoes currently being loaded about every eight days. Meanwhile, Pikka's initial production wells are delivering approximately 23,000 barrels per day, with plateau output of around 80,000 bpd (gross) targeted in the third quarter and first sales expected in August.
What drove Santos' production guidance narrowing this quarter?
Second-quarter production rose 3% from the previous quarter to 23.1 million barrels of oil equivalent (mmboe), bringing first-half output to 45.6 mmboe. Santos now expects second-half production to be approximately 20% to 30% higher than the first half and narrowed its full-year production guidance to 99-105 mmboe.
Second-quarter sales revenue increased 6% quarter-on-quarter to $1.35 billion. First-half free cash flow from operations reached about $378 million but was weighed down by one-off commissioning costs at Barossa and Pikka, the timing of LNG cargo receipts, and temporary under-lift positions in Papua New Guinea. The company said these factors are expected to reverse during the second half, supporting stronger cash generation.
Santos also expects higher LNG prices to boost earnings after realizing $11.21 per mmBtu during the quarter. Because most of its LNG contracts are linked to the Japan Crude Cocktail (JCC) benchmark with a three-month pricing lag, the rise in JCC prices above $100 per barrel during the second quarter is expected to lift realized LNG prices in the third quarter.
Beyond the production ramp-up, Santos approved two new brownfield investments in Papua New Guinea during the quarter: the Agogo Production Facility tie-in project, targeting first gas in the second quarter of 2028 with an expected internal rate of return above 50%, and a PNG LNG oil infill drilling campaign expected to deliver returns above 30%. The company also said Papua LNG remains on track for a final investment decision in the fourth quarter of 2026 after securing key regulatory approvals.
Operationally, PNG LNG continued to perform strongly with plant reliability above 98%, while the Moomba carbon capture and storage project surpassed two million tonnes of permanently stored CO? since start-up. Santos also secured regulatory approval to begin its 2026-27 Beetaloo Basin appraisal drilling campaign later this year.
Chief Executive Kevin Gallagher said the first half reflected the challenges of commissioning two major projects simultaneously, but said Barossa's ramp-up and Pikka's early production mark the transition toward a higher-production, higher-cash-flow portfolio in the second half of the year.
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Sinergia Empresarial continuará el seguimiento de esta información sobre santos Narrows 2026 Output Guidance as Barossa and Pikka Ramp Up y ampliará la cobertura conforme se confirmen nuevos elementos relevantes para el ecosistema empresarial.
