Can this blue chip stock retain its shine after deal collapse
The planned takeover of Santos at U$5.626 per share by the XRG Consortium was pulled back because both sides could not agree on risk sharing terms. However, Santos continues to develop its Barossa gas project in Australia and the Pikka phase 1 oil project in Alaska, and reported these being on track for start up.
Santos Limited (ASX: STO)
The planned takeover of Santos at U$5.626 per share by the XRG Consortium was pulled back because both sides could not agree on risk sharing terms. However, Santos continues to develop its Barossa gas project in Australia and the Pikka phase 1 oil project in Alaska, and reported these being on track for start up.
Santos Limited (ASX: STO) has had a very active 2025 with a lot of big steps and deals. The Barossa LNG project is almost finished at 98% with first gas just weeks away. In Alaska the work at Pikka Phase 1 is moving fast and first oil is now expected earlier in Q1 2026. The company also signed an MOU with Orica for supplying up to 15 PJ of gas each year for 10 years from its Narrabri project adding to the other older deals with ENGIE. These deals show strong demand for Narrabri gas and Santos keeping its focus on domestic supply.
On the financial side of things Santos posted a strong half year. Sales revenue was about U$2.6 billion and EBITDAX reached U$1.8 billion and underlying profit was U$508 million. Net profit after tax came at U$439 million even with a non cash impairment in PNG. Free cash flow was U$1.1 billion backed by production of 44.1 mmboe and LNG prices at U$11.57 per mmbtu. The balance sheet is in good shape with liquidity of U$3.9 billion and gearing at 23.7% which is inside the target range. Shareholders got an interim dividend of 13.4 US cents per share which was partly franked and it was 40% of free cash flow as per dividend policy. Production cost also dropped to U$7.28 per boe showing better efficiency and cost control.
Looking forward Santos is counting on more production and cash from Barossa LNG and Pikka Phase 1 which should lift output by nearly 30% by 2027. It also kept its full year production guidance at 90–95 mmboe with costs around U$7.00–U$7.40/boe. Development is going steady with Narrabri aiming for FID in 2026 along with Moomba CCS getting close to next stage and new backfill options in PNG and WA. Almost 90% of its LNG sales are already contracted for the next 5 years and the company would like to maintain it’s strong position to keep steady cash flows supported by its low cost model along with strong project pipeline and ongoing decarbonisation initiatives.
(Source: Company Announcements)
Get Your Free Report on Top 5 ASX Stocks on WhatsApp
Instant Access. No Credit Card Required.
Receive on WhatsApp
Checkout Our Recommendation for free - 7 days free trial
Start Free TrialASX Stock Research & Recommendations — 7‑day free trial
Independent, analyst‑driven insights.
- Stock of the week report
- Daily Analysis Report
- No credit card required
Get Your FREE Report
Discover the Top ASX Stocks to Invest In 2026!
Expert Analysis of Top-Performing ASX Stocks
Market Insights and In-Depth Research
Buy, Sell, And Hold Recommendations
Almost There!
Enter your details to download the report
Success!
Preparing your download...
Latest Article
Disclaimer
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.
