Santos (ASX: STO) has reported strong financial results for 2024, with net profit after tax of US$1.2 billion and free cash flow from operations of US$1.9 billion, reinforcing the company’s low-cost, cash-generative model. Sales revenue for the year was US$5.4 billion, and EBITDAX reached US$3.7 billion.
The company declared a final unfranked dividend of US 10.3 cents per share, bringing total dividends for the year to US 23.3 cents per share, or 40% of free cash flow from operations. Liquidity remains strong at US$4.4 billion, with gearing at 23.9%.
Operational milestones and project updates
Santos CEO Kevin Gallagher highlighted the successful start-up of Moomba CCS Phase 1 in September, which reduced Scope 1 and 2 emissions by 26% compared to the 2019-20 baseline. He also reaffirmed confidence in building a commercial carbon management business, given increasing demand for CCS services in Australia and Asia.
On the Barossa LNG project, Santos confirmed it is 91% complete and remains on track for first gas in Q3 2025. Three wells have been drilled and completed, with the fourth well suspended for later completion. The Darwin Pipeline Duplication is nearing completion, ensuring connectivity between the Barossa field and the Darwin LNG plant.
Santos also reported strong progress in its Pikka Phase 1 oil project in Alaska, with 16 of 26 wells drilled and completed and pipeline installation ahead of schedule. First oil remains on track for mid-2026, with the potential for an early start-up depending on logistics and weather conditions.
Financial discipline and shareholder returns
Despite a volatile commodity market, Santos continues to focus on cost efficiency and capital discipline. The company is targeting US$100m–$150m in annual structural savings over the next two years to enhance shareholder returns.
Santos’ LNG marketing division secured long-term supply agreements with Hokkaido Gas and Shizuoka Gas Co, as well as mid-term contracts with TotalEnergies and Glencore, keeping 90% of its LNG portfolio contracted over the next five years.
2025 guidance and outlook
Santos has provided 2025 production guidance of 90–97 mmboe, with sales volumes projected at 92–99 mmboe. The company expects capital expenditure of US$1.2bn–$1.3bn for sustaining activities and a similar range for major project development.
The company reaffirmed its commitment to growing production while maintaining cost discipline, with a target unit production cost below US$7 per boe once Barossa and Pikka Phase 1 come online.
Santos will continue to expand its reserves and resources to support long-term production, with its 2P reserves and 2C contingent resources totalling 4,897 mmboe. The company remains focused on enhancing operational efficiency, decarbonisation, and expanding LNG market opportunities.
