Santos Q1 2026: Higher revenue, project ramp-up, steady guidance

The Santos Ltd (ASX: STO) share price could be on the move today, with the company reporting a 3% lift in March quarter revenue to US$1.27 billion and production of 22.5 mmboe, up 1% from the prior quarter.

What did Santos report?

• Production: 22.5 million barrels of oil equivalent (mmboe), up 1% quarter-on-quarter and 3% year-on-year
• Sales revenue: US$1.27 billion, up 3% from Q4 2025
• Free cash flow from operations: ~US$383 million, steady on the prior quarter
• Capital expenditure: US$441 million, down from US$619 million last quarter
• Full-year 2026 production and cost guidance unchanged

What else do investors need to know?

The first quarter saw major milestones across key projects. Pikka phase 1 in Alaska delivered early mechanical completion, with commissioning progressing and first oil sales expected soon. Barossa LNG reached its first equity cargoes, and ramp-up is set to accelerate as facilities return to full operation following commissioning works.

Santos also completed appraisal success at the Quokka-1 well in Alaska, pointing to high-quality resources that may boost future production. Meanwhile, operational reliability remained strong across the PNG LNG and GLNG projects, with new contracts such as the 10-year gas sales agreement with the South Australian Government supporting domestic energy security.

What did Santos management say?

Managing Director and Chief Executive Officer Kevin Gallagher said:

Our base business continues to perform reliably, supporting free cash flow generation. The Pikka phase 1 oil project is now mechanically complete with commissioning activities progressing well and first sales oil expected in the coming weeks. The Barossa project has had a few challenges during commissioning. Pleasingly we have now replaced the dry gas seals on the compressors and the FPSO is expected to commence ramping up as we complete the flushing and cleaning of the heat exchanger trains. The Quokka-1 appraisal well was a resounding success, confirming a high-quality resource that reinforces the strength of our Alaska portfolio. During the quarter, Santos strengthened its strategic position in Australia through key commercial outcomes, including a long-term gas supply agreement with the South Australian Government and a final investment decision on the Moomba Central Optimisation project. Our portfolio of high-quality LNG assets, located close to Asian markets, is well positioned to meet strong and growing LNG demand across this region. Our focus remains on safe and reliable operations across our base business, disciplined capital allocation and delivering our projects. As Barossa ramps up and Pikka phase 1 comes online, Santos is well positioned to deliver production growth within the $45 to 50 per barrel all-in free cash flow break even target range for the business. This will set Santos up to deliver sustainable, long-term value and competitive shareholder returns.

What’s next for Santos?

Santos reaffirmed its full-year 2026 guidance for production between 101–111 mmboe and capital expenditure of around US$1.95–2.15 billion. Key project ramp-ups are expected over coming quarters, including first sales oil from Pikka phase 1 and further Barossa production.

Looking forward, final investment decisions on optimisation and LNG expansion projects are progressing, and the company’s ongoing focus will remain on reliability, disciplined spending and maximising returns as market conditions evolve.

Santos share price snapshot

Over the past 12 months, Santos shares have risen 25%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 12% over the same period.

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The post Santos Q1 2026: Higher revenue, project ramp-up, steady guidance appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.