SYDNEY, June 27, 2026, 06:02 AEST
- Santos ended Friday at A$7.14, gaining 1.42% for the session. Shares have dropped 2.59% over the last five days.
- Pikka’s gross output sits at around 20,000 barrels per day, well below the Q3 target of 80,000 bpd gross.
- Brent dropped 10.86% this week, bringing Santos’s oil-price cash flow risk up again.
Santos Limited ASX:STO is set for the week with its Alaska plans looking clearer, but oil prices are softer. Shares closed at A$7.14 Friday, up 1.42% on the day. Over five days, the stock dropped 2.59%. Year-to-date, STO has gained 15.72%, according to MarketScreener data. The Australian market was shut for the weekend. MarketScreener
Santos isn’t focused on Friday’s bounce. The problem is the gap between Pikka’s current output and what Santos has to see by the third quarter.
Santos last week said it started continuous production at Pikka Phase 1 on Alaska’s North Slope. Initial wells are producing around 20,000 barrels per day gross. The company expects to reach 80,000 bpd gross in the third quarter. Santos owns 51% and Repsol SA BME:REP has 49%, so Santos’s current share is about 10,200 bpd and should rise to roughly 40,800 bpd at peak, before royalties and other project adjustments. Petroleum Australia
There’s about 30,600 bpd of net production yet to hit. With a market cap of around A$23.19 billion, Santos faces a key short-term operating hurdle, not just another project update. Google Finance listed the company’s 52-week high at A$8.24, with Friday’s trading at 10.55 million shares, under the average of 12.38 million. Google
Santos CEO Kevin Gallagher called Pikka a “high-quality, low-cost oil development with strong economics and long reserves life.” Gallagher said the company plans to begin seawater injection for pressure support and will add more wells gradually to hit its plateau target. World Oil
Oil pressured trading. Brent crude dropped 4.34% Friday to settle at $71.99 a barrel. For the week, Brent lost 10.86% as worries faded about supply from the Strait of Hormuz, Reuters reported. Reuters
Santos spelled out in its May briefing why the price is key. The company said it will bring in $550 million to $600 million more in free cash flow for every $10 the realised oil price beats free-cash-flow breakeven once Barossa and Pikka hit steady rates. Santos
Brent finished Friday at $71.99, and that price isn’t what Santos actually gets. But just as a reference, it’s roughly $22 to $27 higher than the $45-$50 per barrel breakeven that Santos flagged at its investor day. By the company’s own numbers, that gap would mean $1.2 billion to $1.6 billion in extra annual free cash flow when Barossa and Pikka hit plateau output.
That’s how the stock can finish higher on Friday but still seem risky. Oil prices in the low $70s and Pikka hitting its Q3 goal keeps the cash-flow plan on track. But if crude drops or Pikka’s ramp slows, there’s less incentive for the market to buy into the 2026 production story before the results are in.
Santos didn’t get much of a boost from the broader market. The S&P/ASX 200 closed up 15.5 points, or 0.18%, at 8,764.2 on Friday. Tech stocks struggled and held back gains in the region. News
Santos’s next scheduled update isn’t due next week. Market Index puts the company’s next forecast quarterly numbers at July 16, with an interim report set for Aug. 24. Marketindex
