Santos Ramps Up Production in Q1 as Barossa Nears Final Stretch

April 17, 2025 11:47 AM AEST | By Team Kalkine Media

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Santos Ramps Up Production in Q1 as Barossa Nears Final Stretch — Image source: shutterstock

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Highlights

Santos boosts production in Q1

Revenue dips amid softer prices

Barossa project nears completion

Oil and gas producer Santos (ASX:STO) has delivered a modest lift in production for the March quarter, even as sales volumes and revenue edged lower, reflecting a softer pricing environment and reduced third-party purchases.

In its latest quarterly update, the company revealed production increased 2% to 21.9 million barrels of oil equivalent (mboe), supported by higher gas and crude volumes from Western Australia. However, sales volumes slightly decreased by 1% to 23.3 mboe, contributing to an 8% fall in revenue to US$1.29 billion (A$2.02 billion) compared to the previous quarter.

The company attributed the dip in sales to a lack of crude lifting from the Pyrenees field and reduced third-party purchases. Despite this, Santos shares (ASX:STO) moved 2% higher in early ASX trade, reflecting investor optimism about the company's progress on strategic projects and its resilient financial footing.

One of the key updates in the report was the ongoing advancement of the Barossa Gas project, a cornerstone development for the company. As of the end of March, the project was reported to be 95.2% complete and remains on schedule for first production in the third quarter of 2025. Once operational, Barossa is expected to play a major role in bolstering the company’s LNG output and long-term growth strategy.

Santos continues to emphasize cost discipline and operational strength, highlighting that it expects to maintain free cash flow generation even at lower oil price scenarios. The company reiterated its breakeven oil price target of less than US$35 per barrel for 2025, underlining its financial resilience in a fluctuating energy market.

While pricing pressures and logistical factors influenced quarterly sales, the steady rise in output and major project momentum point to a stable outlook. With Barossa nearing completion and domestic production performing strongly, the company appears well-positioned to navigate the current environment and meet long-term objectives.

Santos’ latest update reflects a business focused on disciplined execution, with a strategic emphasis on energy security and project delivery. The next major catalyst for the company is expected to be the commissioning of Barossa, which could mark a new phase of growth in its LNG operations.

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