Santos Limited reported a strong first quarter for 2025, with operational highlights including free cash flow from operations reaching approximately US$465 million—a 9% increase over the previous quarter—and sales revenues of US$1.3 billion. Production reached 21.9 million barrels of oil equivalent (mmboe), representing a 2% increase compared to the last quarter, despite sales volumes dipping by 1%. The company’s cost discipline remained evident as unit production costs are expected to fall within the market guidance of US$7.00 to US$7.50 per barrel of oil equivalent. Meanwhile, the gearing ratio was maintained at 22.2% (25.1% when operating leases are included). Operational performance was bolstered by robust production activity in Western Australia, where production volumes surged over 18% quarter on quarter, largely driven by successful infill well operations. The high reliability of the operated gas facilities, including a 99.8% uptime and full availability at the PNG LNG plant, underscored the strength of Santos Limited’s low-cost operating model. Notably, record upstream production was achieved from the Scotia field with daily rates of 97.3 terajoules, supporting an annual rate of 6.0 million tonnes of LNG for the quarter. Additionally, an executed memorandum of understanding with Tamboran Resources paves the way for future exploration into gas export options via Darwin, with capacity expansion approved up to 10 million tonnes of LNG per annum. In terms of project development, major initiatives remain on track with strong progress. The Barossa LNG project is 95.2% complete—with pipelines, subsea infrastructure, and FPSO commissioning well advanced—and is expected to deliver first gas in the third quarter of 2025. Similarly, Pikka phase 1 is 82.2% complete, with promising well flow rates averaging 6,900 barrels per day, and the potential for an early startup remains under consideration. These projects, once online, are anticipated to increase production by more than 30% by 2027. Santos Limited is also making great strides in its carbon management strategy, as evidenced by steady performance at the Moomba carbon capture and storage facility, which has injected over 685,000 tonnes of CO2-equivalent into secure storage since its commencement. Technical indicators within the quarter reflect a careful balance between robust physical production and disciplined financial management. Average realised prices across various product categories continued to fluctuate, with LNG prices adjusting from earlier higher levels and oil prices benefiting from improved Brent and Platts MOPJ pricing. Capital expenditure was managed efficiently, with a significant reduction relative to the prior quarter, and hedging strategies—including zero-cost collars with a floor price of US$70/bbl—offer protection amid commodity price volatility. Bullish sentiment is supported by the steady free cash flow generation, low-cost operations, and the promising near-term output from key development projects such as Barossa LNG and Pikka phase 1. The company’s ability to deliver production at a breakeven oil price below US$35 per barrel, even in a volatile market environment, further reinforces its resilient business model and strong strategic positioning. Conversely, bearish views may note the decline in sales volumes and revenues compared to the previous quarter, as well as operational challenges in the Cooper Basin due to flood events and potential delays in project timelines. These concerns, coupled with ongoing market volatility, suggest that while Santos Limited’s fundamentals remain solid, caution is warranted in the current economic environment.