Forex · Capitals Wire
Home Energy Company News By Charles Kennedy - Oct 22, 2026, 9:44 PM CDT Australian energy producer Santos reported record production and cash flow in the third quarter of 2026, driven by rising output from its Barossa LNG development offshore Australia and the Pikka oil project in Alaska. Quarterly production reached a record 26.3 million barrels of oil equivalent (mmboe), increasing 23% year-over-year and nearly 14% from the previous quarter. Production for the first nine months of 2026 totaled 71.9 mmboe, approximately 10% higher than the same period last year.
The production gains helped Santos generate record quarterly free cash flow from operations of approximately $1.07 billion, while free cash flow reached $957 million. Quarterly sales revenue climbed 49% from the previous quarter and 78% year-over-year to approximately $2.01 billion. The strong performance reflects contributions from two major growth projects that have significantly expanded Santos' production capacity and international operations.
At Barossa, natural gas production stabilized during the quarter, with feed gas deliveries to the Darwin LNG facility reaching a record peak of approximately 600 million cubic feet per day. Darwin LNG recorded 98.5% operational reliability, with ten LNG cargoes and two condensate cargoes shipped during the period. Meanwhile, the Pikka oil project in Alaska briefly exceeded 80,000 barrels per day of gross production before the end of September, although output was temporarily disrupted by weather-related issues and a shutdown affecting the Kuparuk pipeline.
Santos said Pikka production would remain near 70,000 barrels per day temporarily to allow water injection to restore reservoir pressure before returning toward 80,000 barrels per day. Despite the production records, Santos narrowed its full-year 2026 production guidance to 99–102 mmboe, compared with its previous range of 99–105 mmboe. Chief Executive Kevin Gallagher said the results demonstrated the anticipated improvement in production and cash generation following the startup of Barossa and Pikka, with further contributions expected during the fourth quarter.
The company's international operations in Papua New Guinea and Alaska generated approximately half of its quarterly free cash flow, highlighting the growing importance of those assets to Santos' earnings profile. Santos is also expanding its LNG portfolio through an agreement to acquire an additional 3.3% interest in Papua LNG from TotalEnergies, increasing its ownership to 21% after the Papua New Guinea government's participation. The project is targeting a final investment decision in the fourth quarter of 2026, subject to outstanding requirements.
In Australia, Santos and its GLNG partners agreed to acquire the Greater Meridian coal seam gas project in Queensland, with Santos set to take a 30% stake and become operator following completion. Elsewhere, early appraisal results from the Jibera South 1 well in the Beetaloo Basin indicated promising gas-bearing shale formations, supporting the company's potential multi-layer development strategy. The quarterly performance marks a significant shift for Santos as investments in large-scale LNG and oil developments translate into higher production and cash generation.
The company's next priorities include stabilizing Pikka output, maintaining Barossa reliability and advancing Papua LNG toward an investment decision. By Charles Kennedy for Oilprice.com More Top Reads From Oilprice.com Petrobras' Deepwater Push Sets Off a Race for Offshore Vessels Oil Prices Climb Above $110 as Middle East Supply Fears Persist Russia to Send First Diesel Tanker to U.S. on Thursday Back to homepage Charles Kennedy Charles is a writer for Oilprice.com More Info EXXON Mobil -0.35 Open 57.81 Trading Vol. 6.96M Previous Vol. 241.7B BUY 57.15 Sell 57.00
