Gas producer to cut jobs, review assets as profit falls

At the same time, the organisation announced it will undertake a strategic review of its Australian gas portfolio, including its Cooper Basin and WA assets, and the Narrabri Gas Project in NSW.

The review has raised questions about Santos' plans for the projects, and whether it could sell them outright or seek co-investors to share the risk burden.

The announcement came as the group posted a 25 per cent slump in underlying profit to $US898 million ($A1.3 billion) for calendar 2025, as soft commodity prices weighed.

The headcount reduction will follow major projects Barossa and Darwin LNG moving from the growth phase to part of Santos' core business.

"As these major growth projects come to an end and become a part of the base business, and as we deliver on our cost savings objectives, we are targeting a headcount reduction of around 10 per cent, rightsizing the business," CEO and managing director Kevin Gallagher said in a statement.

First cargo from Barossa and Darwin LNG was delivered in early 2026, within six months of the original schedule and within budget.

However, weak commodity prices outweighed an uptick in production volumes as sales revenue fell to $US4.9 billion ($A6.9 billion) in 2024 from $US5.4 billion ($A7.6 billion) in 2024.

Mr Gallagher remained optimistic about the cost side of the result.

"Our base business has performed exceptionally well with production maintained and the best unit production costs in a decade, achieved through continued commitment to the disciplined low-cost operating model," he said.

"We are positioned now to grow the business with the financial flexibility to pursue additional opportunities while rapidly reducing gearing." 

Guidance for calendar 2026 remains unchanged, with Santos targeting sales volumes of 101-111 million barrels of oil equivalent for the year, with projected per unit costs of $6.95 to $7.45.

Investors sold down Santos shares, which fell around 2.5 per cent to $6.50 in early afternoon trading.

The results came a day after the Federal Court threw out a shareholder advocacy group's case against Santos over greenwashing allegations around its net zero claims and being a producer of so-called "clean" energy.

The Australasian Centre for Corporate Responsibility unsuccessfully claimed the oil and gas giant had engaged in misleading or deceptive conduct in its communications with shareholders on its environment record and targets.

Santos will pay a final 10.3 US cent unfranked dividend, taking the full year dividend to 23.7 US cents per share, representing 43 per cent of free cash flow from operations.