Santos will cut around 10% of its workforce as it transitions major growth projects into steady-state operations, even as the company reported $1.8 billion in free cash flow and increased shareholder returns for 2025.
Santos Ltd posted annual production of 87.7 million barrels of oil equivalent (mmboe) and sales volumes of 93.5 mmboe, generating $4.9 billion in revenue. Underlying net profit after tax came in at $898 million.
Free cash flow from operations reached $1.8 billion, driven by what the company described as strong base business performance under its long-running low-cost operating model.
The Board declared a final dividend of US 10.3 cents per share, unfranked. Combined with the interim dividend of US 13.4 cents per share, total 2025 dividends reached US 23.7 cents per share, equivalent to $770 million in cash returns, or 43% of free cash flow.
Unit production costs fell to $6.78 per boe, excluding Bayu-Undan, marking the lowest level in a decade. Gearing stood at 21.5% excluding leases, or 26.9% including leases, with liquidity remaining strong.
As Barossa, Darwin LNG life extension and Pikka Phase 1 near full ramp-up, management said it is targeting a headcount reduction of around 10% to “rightsize” the business as major capital projects transition into the base portfolio.
CEO Kevin Gallagher said the results demonstrate the durability of the disciplined operating model introduced in 2016, which targets a sub-$35/bbl free cash flow break-even from operations. Santos has achieved that target every year since, despite inflationary pressures.
Barossa and Darwin LNG have been delivered within six months of the original schedule and within budget, with first cargo achieved in early 2026. In Alaska, Pikka Phase 1 remains on track for first oil late in the first quarter of 2026, with ramp-up to plateau production expected by the end of the second quarter.
Santos said Moomba CCS has stored more than 1.5 million tonnes of CO? equivalent since start-up and that the company has achieved its 2030 emissions reduction target of 30% five years ahead of schedule.
Looking ahead, 2026 guidance remains unchanged. The company expects production and sales volumes of 101–111 mmboe, capital expenditure of approximately $1.95–$2.15 billion, and unit production costs between $6.95 and $7.45 per boe.
With major projects moving into cash generation mode, Santos said it is targeting an all-in free cash flow break-even oil price of $45–50 per barrel through 2030 while maintaining a commitment to shareholder returns and balance sheet discipline.
