Australian oil and gas producer Santos on Thursday said it expected higher production this year, as the first cargo from the restarted Darwin LNG (DLNG) plant was being loaded for delivery and its Pikka oil project in Alaska was nearing completion.
Santos had planned for its first DLNG cargo from the Barossa field to depart at the end of 2025, but later said repairs to piping systems had slowed progress.
Barossa gas and the start-up of oil production from Pikka are expected to boost production by up to 30 per cent in 2026.
On Thursday, Santos confirmed the first cargo was being loaded onto an LNG tanker called the Kool Blizzard and was headed for Sakai in Japan.
Santos shares rose 5.12 per cent, or 31 cents, to A$6.37 at 0313 GMT, while the broader SP/ASX 200 benchmark index advanced 0.63 per cent.
Citi analyst Tom Wallington wrote in a note that the loading could, "allay investor concerns that more material issues emerged during commissioning."
He said coupled with progress at the Pikka project, the continued de-risking across Santos’ portfolio outweighed softer 2026 production guidance.
The Adelaide-based company also said its share of the capital spending for the first phase of the Pikka project had increased by $200 million, thanks to higher labour and materials costs.
The country's second-largest independent gas producer expects output of between 101 million and 111 million barrels of oil equivalent for the 12 months ending December 31, compared with its 2025 output of 87.7 mmboe and Visible Alpha's consensus estimate of 108.5 mmboe.
Santos said its Pikka phase one project in Alaska was 98 per cent complete at the end of the quarter. The project is on track to produce first oil late in the first quarter of 2026 with an initial oil rate of about 8,000 barrels of oil per day.
"Once at full rates, Barossa LNG and Pikka phase one together are expected to lift Santos' production by around 25 to 30 per cent by 2027 compared to 2024 levels," CEO Kevin Gallagher said in a statement.
It posted a nine per cent sequential rise in fourth-quarter revenue to $1.23 billion, due to higher LNG and condensate sales volumes. That was largely in line with Visible Alpha's consensus estimate of $1.25 billion.
Sales volumes were higher than in the September quarter as it recovered from flooding in South Australia while gas production from Western Australia rose.
Fourth-quarter revenue was 12 per cent lower year-on-year mainly due to lower prices. Its average realised crude oil price fell nearly 16 per cent to $66.66 per barrel, and the realised LNG price fell to $10.33 per million British thermal units (mmBtu) from $12.39 per mmBtu the prior year.
Santos' quarterly production of 22.3 million barrels of oil equivalent missed the Visible Alpha consensus estimate of 23.1 mmboe.
(Reporting by Helen Clark in Perth, Jasmeen Ara Shaikh, Himanshi Akhand and Shivangi Lahiri in Bengaluru; Editing by Sahal Muhammed, Alan Barona, and Jamie Freed)