Santos has announced its financial results for the year ending 2025, reporting net profit of A$818m ($578.6m), a 33.9% decrease from the previous year's A$1.26bn.
The Australian energy company's underlying profit, excluding significant items, was A$898m, down 25.2% from A$1.2bn in 2024.
In a strategic move to optimise operations, Santos is targeting a headcount reduction of around 10% as major growth projects are integrated into its base business.
Santos managing director and CEO Kevin Gallagher said: "The results demonstrated the strength of our base business, built through the continued commitment to the disciplined low-cost operating model.
“As these major growth projects come to an end and become a part of the base business, and as we deliver on our cost savings objectives, we are targeting a head count reduction of around 10%, rightsizing the business."
Operationally, Santos produced 87.7 million barrels of oil equivalent (mboe), with unit production costs at A$6.78 per barrel of oil equivalent (boe). The company executed three liquefied natural gas (LNG) sale and purchase agreements, maintaining high operational reliability.
Gallagher said: "Our base business has performed exceptionally well with production maintained and the best unit production costs in a decade, achieved through continued commitment to the disciplined low-cost operating model."
Santos said that the company achieved its 2030 emissions reduction target of 30% five years early, driven by the Moomba CCS (carbon capture and storage) phase one project.
Gallagher added that the Moomba CCS phase one project, recognised as one of the lowest-cost CCS projects globally, was central to Santos’ success in providing real emissions reductions. He noted that it underscored the credibility of the company's decarbonisation pathway.
The company's financial strategy has been underpinned by its operating model, targeting less than A$35 per barrel (bbl) free cash flow from operations.
Gallagher said: "In 2016 we set the operating model to target less than A$35/bbl free cash flow from operations, and we have achieved it every year since, despite inflationary pressures.”
In 2025, Santos executed several major projects including Moomba CCS phase one, Barossa LNG and the Darwin LNG life extension.
Gallagher mentioned that strong free cash flow from the base business had supported funding growth projects and increasing dividends. He stated that the company was now positioned to expand with financial flexibility to pursue new opportunities while reducing gearing.
The Santos CEO also emphasised that the Barossa and Darwin LNG projects were completed ahead of schedule and within budget.
Looking ahead, Gallagher indicated that the Pikka phase one project in Alaska, US, was on track to deliver first oil late in the first quarter of 2026 (Q1 2026), as it moved into the final stages of commissioning. He noted that the project planned to ramp up production to a full plateau rate by the end of Q2.
For 2026, Santos has set its production guidance at 101mboe–111mboe, with sales volumes expected to match this range. Capital expenditure is projected to be approximately A$1.95bn–2.15bn, focusing on exploration, appraisal, sustaining capital and major growth projects.
Unit production costs are anticipated to range from A$6.95 to A$7.45/boe.
Last month, Santos reported the successful loading and dispatch of the maiden LNG cargo from the Barossa Gas Project off the coast of the Northern Territory.
