Santos to Focus Investment on Three Regions, Repurpose Australian Domestic Assets

By David Winning

SYDNEY--Santos said it would focus investment on growing its position in three regions, including Alaska and Papua New Guinea, while putting less of a priority on its Australian domestic oil and natural gas assets.

Santos on Tuesday said the shift would deliver significant savings in the Cooper Basin of central Australia while supporting a planned stepup in returns to shareholders under its new capital framework.

The strategic update comes less than a year after a consortium led by Abu Dhabi National Oil Co. abandoned a $18.7 billion takeover offer for Santos, highlighting disagreements over terms given the length of time it could take for a deal to complete.

However, conflict in the Middle East and the commissioning of growth projects offshore Australia and in Alaska have powered Santos's stock higher since deal talks collapsed. Santos's share price ended Monday at 7.94 Australian dollars (US$5.70), up some 18% on levels achieved immediately after the bid consortium walked away.

Santos said it wants gearing--a measure of debt relative to equity--to be at the lower end of its 15-25% target range. To achieve this goal, Santos said it plans to reduce its net debt by around $2.5 billion by 2030.

Santos said the repurposing of its Australian domestic oil and natural gas business as a lower capital-intensity, higher-margin business focused on meeting domestic gas and decommissioning commitments would also deliver savings.

"In the Cooper Basin alone, focusing on higher margin production in the Moomba Central fields area--and deprioritising the development of other areas of the Cooper--is expected to keep production around current levels but save $300 million in capex between 2027 and 2030, and save an additional $150 million annually thereafter," Managing Director Kevin Gallagher said.

Santos said its future focus will be on investing in oil and liquefied natural gas production in three areas: Alaska, Papua New Guinea and Australia's Beetaloo and Bedout basins.

Santos recently started up the Barossa natural-gas project in Australia, which is now operating at 75% of planned production rates for this year, and this month it announced first oil from the Pikka Phase 1 development in Alaska.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

May 25, 2026 19:23 ET (23:23 GMT)