Santos Ltd (ASX: STO) is one of Australia’s largest independent oil and gas producers, with a diversified portfolio across LNG, domestic gas, liquids, and exploration. Headquartered in Adelaide, Santos has a significant presence in Australia, Papua New Guinea, Timor-Leste, and the United States (Alaska). The company plays a central role in Australia’s energy security and low-carbon transition through long-life, low-cost assets and large-scale carbon capture and storage (CCS) projects. It is a top 50 ASX company with a market capitalisation of $18.2 billion.
Operational Progress and Project Pipeline
In its Q1 FY25 update released on 17 April 2025, Santos outlined strong progress across all core operations. Production for the quarter was 21.6 mmboe, supported by continued performance at PNG LNG, Bayu-Undan, and domestic gas assets. While production was slightly down on the previous quarter due to scheduled maintenance, sales volumes remained robust at 23.3 mmboe, with total revenue of US$1.6 billion — reflecting sustained demand and pricing in LNG and oil markets.
The flagship Barossa gas project is now 89% complete, with first gas targeted for Q3 2025. Santos highlighted that offshore pipelay activities and subsea construction have been finalised, while onshore commissioning is progressing steadily. Barossa is expected to supply Darwin LNG, replacing the declining Bayu-Undan field.In Alaska, the Pikka Phase 1 oil development is 63% complete. The project achieved key milestones during the quarter, including completion of drilling pad installations and initiation of well programs. Santos reaffirmed its first-oil timeline for 2026, which positions it well to capture long-cycle oil demand trends.
Meanwhile, the Moomba CCS project — a key part of Santos’ low-carbon strategy — reached 85% mechanical completion, with first CO₂ injection expected by Q3 2024. Once operational, Moomba CCS will store up to 1.7 million tonnes of carbon dioxide per annum, making it one of the largest of its kind in the southern hemisphere. Across all sites, Santos reported improved safety performance and reaffirmed its 2025 guidance. The update underlines Santos’ execution strength in delivering large-scale energy and decarbonisation projects concurrently, even in a cost-pressured global environment.
Market Positioning and Investor Outlook
Santos enters Q2 2025 with clear momentum, underpinned by a robust operating profile and strategic project pipeline. With three major projects nearing key commissioning stages — Barossa, Moomba CCS, and Pikka — the company is approaching a multi-asset revenue inflection point. These developments are expected to boost long-term earnings visibility and cash flow stability.
Despite recent commodity volatility, Santos has remained resilient. LNG contracts are indexed to oil prices, and the company benefits from geographically diversified offtake agreements across Asia-Pacific and the U.S. This supports predictable revenue even amid short-term price swings. Q1 revenue of US$1.6 billion reflects this robustness and aligns with prior quarters, despite lower seasonal production.
Investors will be focused on several near-term catalysts. These include Barossa’s transition into commissioning phase, Moomba CCS’s first injection milestone, and updates on oil flow rates from Pikka construction. Importantly, Santos reiterated its 2025 capital guidance, suggesting cost discipline remains intact across its global portfolio.
The stock closed at $5.605 on 17 April, up 2.10% on the day. While the 12-month return remains negative (-27.4%), recent momentum and forward visibility may shift sentiment, particularly as capital expenditure peaks and free cash flow rises in 2025 and 2026.Santos’ dividend yield of 6.32% and a modest PE ratio of 9.45 offer further support for value-focused investors seeking energy sector exposure with a near-term re-rating potential. With a market cap of $18.2 billion and a top-tier sector ranking, Santos remains a cornerstone ASX energy holding.
As the energy transition accelerates, Santos’ dual strategy of supplying low-cost gas and building carbon capture infrastructure gives it an integrated advantage. The Q1 update confirms execution capability, capital strength, and a clear runway for long-term returns.