Santos Limited (STS1) AI Stock Analysis

Company Guidance

The guidance from the call was that Santos expects materially stronger H2 cash generation with second‑half production ~20–30% higher than H1, supported by July’s stronger performance, and the Board declared an interim dividend of USD 0.116/share; H1 results were sales revenue $2.6bn, EBITDAX $1.6bn and free cash flow from operations $378m, with H1 production 45.6 million boe (up 3% y/y). Key operational targets include Pikka ramping from ~23,000 bbl/d gross in H1 to an ~80,000 bbl/d gross plateau by end‑Q3 (first cargo 450,000 barrels lifted), Barossa’s six wells at ~300 mmscfd each with Barossa production ~550 mmscfd rising to ~600 mmscfd by quarter‑end and an ~8‑day cargo cadence, LNG sales 7.7 Mt gross, H1 LNG realized $10.95/MMBtu and crude realized ~$92/bbl, unit production cost $7.53/boe (target < $7/boe over time) and LNG upstream unit cost $6.80/boe. Balance sheet and risk metrics: net debt ≈ $6bn, liquidity $3.8bn, gearing 28.1% incl leases (23.2% excl) with no maturities before Sep‑2027, target gearing 15–25% and $2.5bn net‑debt reduction by 2030; free‑cash‑flow breakeven $45–50/bbl to 2030 (operational breakeven < $35/bbl) and sensitivity that each $10 Brent above breakeven lifts FCF from ~ $400m today to ~$550–600m at plateau. H2 hedges: 11.5m bbl zero‑cost collars (floor $67.10, avg cap $98.59); FX hedges AUD975m at $0.643 (H2) and ~AUD1.5bn at $0.658 (2027).