The Santos Ltd (ASX: STO) share price rose more than 2% after its HY26 result.
Santos is one of the ASX’s largest oil and gas businesses on the ASX.
FY26 result
Here are some of the highlights for the six months to 30 June 2026:
- Total revenue rose slightly to $2.7 billion
- EBITDAX (EBITDA explained, X stands for foreign exchange) decreased 12% to $1.56 billion
- EBIT declined 15% to $581 million
- Profit before tax (PBT) declined 30% to $393 million
- Net profit after tax (NPAT) dropped 19% to $355 million
- Underlying profit fell 22% to $397 million
- Interim dividend of US$0.116 per share
What happened in this report?
Santos said it’s continuing to deliver strong operating performance.
The company said its first-half production was 45.6 million barrels of oil equivalent, which was up 3% year on year.
Santos said its free cashflow from operations was $378 million from strong base business performance, offset by commissioning of projects and cargo timing effects, which are expected to unwind in the second half.
The ASX oil and gas share said this period reflected a period of transition for the company as the Pikka project commenced production. Barossa continued to progress through commissioning and ramp-up, underpinned by the base business which performed “strongly”.
Management commentary
The Santos Managing Director and CEO Kevin Gallagher said:
With the major development build and peak major project capex for Barossa and Pikka behind us, second-half production is expected to be around 20 to 30 per cent higher than the first half, supporting stronger free cash flow and returns for shareholders.
The Papua LNG project remains a focus for the second half, and is on track for a final investment decision, targeted for the fourth quarter of 2026. Project financing continues to progress well, with at least 60 per cent targeted to be funded through project financing facilities. Strong performance from the base business and continued capital discipline are funding investment in the next generation of low-cost, high-margin production growth opportunities in our deep portfolio.
That same discipline is securing the long-term future of the Cooper Basin, where we took a final investment decision on the Moomba Central Optimisation project, targeting more than $600 million in capital and operating cost savings over the life of Central Fields, and up to $3 a barrel reduction in Cooper Basin unit production costs. A prepayment on our gas sales agreement to supply 200 petajoules of domestic gas to the South Australian Strategic Gas Reserve from 2030 to 2040 is supporting our investment in the project. This is exactly where we want to invest – in high-return opportunities in and around infrastructure we already own and operate.
Final thoughts on the Santos share price
Santos can’t control what happens with energy prices, which is a big factor in the company’s success year to year.
But, aside from that it’s doing the right things to grow earnings, which includes the project development. Even so, profit declining is not ideal.
It’s not one of the ASX growth shares or ASX dividend shares I’d buy today. But, it could be a good buy at the right times.
