Sydney, June 26, 2026, 05:05 AEST
- The ASX cash market is closed; Friday is a normal trading day. Santos last closed at A$7.04, down 2.76%.
- Pikka Phase 1 is producing about 20,000 barrels per day gross and targets 80,000 barrels per day in the third quarter.
- Santos’ 51% share at plateau equals 40,800 barrels per day, or 14.9 million barrels annualised. That is 13.4%-14.7% of its 2026 group production guidance.
- At that run rate, each US$10 change in realised oil price would alter annualised gross revenue by about US$149 million before deductions.
Santos Limited ASX:STO enters Friday with more direct oil-price exposure just as crude markets swing on news from the Strait of Hormuz. The shares fell 2.8% to A$7.04 on Thursday, against a 0.7% fall in the S&P/ASX 200.
Woodside Energy Group ASX:WDS also lost 2.9%, closing at A$27.43. The similar declines point to crude prices, rather than a fresh Santos operating problem, as the main driver of Thursday’s selling.
Santos closed at A$7.31 on Tuesday, the day of its latest Pikka update. It fell to A$7.24 on Wednesday and A$7.04 on Thursday. The two-session loss was 3.7%, despite the shift from intermittent output to continuous production at the Alaska project.
“The first production wells are now online and delivering continuous production,” Chief Executive Kevin Gallagher said. Santos plans to start seawater injection in the coming weeks, then add wells toward the 80,000-barrel plateau. World Oil
Santos owns 51% of Pikka, with Spain’s Repsol BME:REP holding the rest. Its net share therefore rises from about 10,200 barrels per day at the current rate to 40,800 barrels per day at plateau.
A flat 365-day run at the target rate would give Santos about 14.9 million barrels a year. That compares with its unchanged 2026 group forecast of 101 million to 111 million barrels of oil equivalent. The comparison is a run-rate measure, not a forecast that Pikka will supply 14.9 million barrels during 2026, because the ramp is still under way.
The same volume shows why crude now has more weight in the stock. A US$10 change in Pikka’s realised oil price would alter annualised gross revenue by about US$149 million at plateau, versus roughly US$37 million at the present production rate. The calculation assumes constant output and makes no allowance for royalties, costs or hedges.
Brent fell 4.3% on Wednesday to settle at US$73.74 a barrel as more tankers left the Strait of Hormuz and supply fears eased. KCM Trade chief market analyst Tim Waterer said Iranian exports could rise quickly if sanctions were relaxed: “we are likely talking weeks rather than months.” Reuters
After the ASX closed, Brent recovered 1.5% to US$74.86 by 1740 GMT on Thursday after a cargo vessel reported an attack near Oman. That gave Santos a firmer lead for Friday, though crude remained near levels seen before the Iran war.
The cash from Pikka is tied to Santos’ plan to cut net debt by US$2.5 billion by 2030 and lower annual interest costs by about US$150 million. Mark Gardner, founder and chief executive of MPC Markets, called the plan “a disciplined reset from Santos and the right move.” The company has also committed to return at least 60% of all-in free cash flow to shareholders from 2026. Reuters
Santos said seawater injection would begin in the coming weeks before more production wells are brought online. Plateau output remains targeted for the third quarter.
