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Santos
(OTC:SSLZY)
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Rating:69Neutral
Price Target:
$6.50
â–²(21.04% Upside)
Action:Reiterated
Date:08/19/26
The score is led by solid profitability and operating cash generation but is held back by weakening free cash flow and higher leverage. Technicals are supportive with an uptrend, though momentum looks stretched. Valuation is mixed (good yield but a mid-to-higher P/E), while the latest earnings call was broadly positive on a stronger H2 outlook but flagged balance-sheet and execution risks.
Positive Factors
Long reserve life and resource base
Santos has a substantial reserve and resource base across Australia, PNG and Alaska. This supports a lengthy production runway, improves asset replacement visibility and provides multiple development options beyond the current project ramp-up.
Negative Factors
Persistent revenue and earnings decline
The multi-year contraction in revenue and earnings shows that Santos's recent profitability has not translated into sustained growth. Continued normalization from the 2022 peak could limit internally generated funding for investment and debt reduction.
Read all positive and negative factors
Positive Factors
Negative Factors
Long reserve life and resource base
Santos has a substantial reserve and resource base across Australia, PNG and Alaska. This supports a lengthy production runway, improves asset replacement visibility and provides multiple development options beyond the current project ramp-up.
Read all positive factors
Santos (SSLZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.97B
Dividend Yield4.02%
Average Volume (3M)7.15K
Price to Earnings (P/E)25.3
Beta (1Y)0.46
Revenue Growth-3.59%
EPS Growth-28.20%
CountryUS
Employees4,028
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.23
Shares Outstanding3,247,773,000
10 Day Avg. Volume9,345
30 Day Avg. Volume7,151
Financial Highlights & Ratios
PEG Ratio-0.48
Price to Book (P/B)0.85
Price to Sales (P/S)2.61
P/FCF Ratio21.37
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.47
Revenue Forecast (FY)$6.76B
Santos Business Overview & Revenue Model
Company Description
Santos Limited, an Australian energy company established in 1954 and based in Adelaide, is a full-spectrum operator in the hydrocarbon sector. It manages the exploration, development, production, transportation, and sale of energy resources for bo...
How the Company Makes Money
Santos makes money primarily by producing and selling hydrocarbons. Its key revenue streams typically include: (1) LNG sales, where Santos’ equity production is sold into LNG markets, often under long-term sale and purchase agreements (SPAs) that ...
Santos Earnings Call Summary
Earnings Call Date:Aug 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 23, 2027
Earnings Call Sentiment Positive
Overall the call is broadly positive: the company successfully brought Pikka online and progressed Barossa through commissioning into production, delivered solid H1 operational reliability and declared a dividend, while outlining a clear path to stronger H2 cash flows as new production ramps and peak CapEx unwinds. Key near-term negatives are commissioning-related costs, cargo timing effects and an elevated gearing level (~28% incl. leases) that weighed on H1 free cash flow; management expects these to improve as Barossa and Pikka reach plateau and recurrent savings are realized.Positive Updates
Safety Performance
No lost time injuries and no Tier 1 process safety incidents in H1 2026; lost time injury rate better than the IOGP global average every year since 2022, underpinning disciplined operations.
Negative Updates
Commissioning and Timing Impacts on H1 Cash Flow
Commissioning costs at Barossa and Pikka, timing of cargo movements (several cargo proceeds received after period end) and a PNG LNG underlift (~1.3 million boe) constrained H1 free cash flow to $378 million; these are reported as timing/commissioning effects expected to reverse in H2.
Read all updates
Q2-2026 Updates
Positive
Negative
Safety Performance
No lost time injuries and no Tier 1 process safety incidents in H1 2026; lost time injury rate better than the IOGP global average every year since 2022, underpinning disciplined operations.
Read all positive updates
Company Guidance
The call guided that Santos expects materially stronger second‑half cash generation after a transitional H1 that delivered sales revenue of $2.6 billion, EBITDAX of $1.6 billion and free cash flow from operations of $378 million (with an interim dividend of USD 0.116/share), following H1 production of 45.6 million boe (+3% y/y) and an expected H2 production lift of about 20–30% versus H1. Management said Barossa is in steady ramp (six wells ~300 MMscfd each; facility ~550 MMscfd now, ~600 MMscfd by quarter‑end; cargo cadence ~8 days; reliability >85% in July; 4 of 7 Barossa cargoes lifted pre‑30 June) and Pikka has reached ~23,000 bbl/d gross at period end with seawater treatment commissioning nearly complete and a path to an ~80,000 bbl/d gross plateau by quarter‑end (first crude cargo ~450,000 bbl); PNG underlift was ~1.3 million boe and ~$300 million of cargo proceeds were received shortly after period end. On costs and balance sheet the company reported unit production cost $7.53/boe (target < $7/boe over time; LNG upstream unit cost $6.80/boe), LNG realized $10.95/MMBtu and crude $92/bbl (JCC now >$100), a free‑cash‑flow breakeven of $45–$50/bbl to 2030 (operations < $35/bbl), sensitivity of an extra ~$550–$600m FCF per $10 Brent above breakeven at plateau (vs ~ $400m today), net debt ~ $6bn, gearing 28.1% incl leases (23.2% excl), liquidity $3.8bn, target $2.5bn net‑debt reduction by 2030, H1 recurrent savings on track to reach $150m by end‑2026, and hedges of 11.5 million barrels for 2H (zero‑cost collars floor $67.10 / avg cap $98.59) plus AUD FX hedges (AUD975m 2H @ $0.643; ~AUD1.5bn 2027 @ $0.658).Santos Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.11B | 5.09B | 5.40B | 5.89B | 7.79B | 4.71B |
| Gross Profit | 1.25B | 1.57B | 3.70B | 2.22B | 5.64B | 1.73B |
| EBITDA | 2.05B | 3.35B | 3.67B | 3.97B | 4.97B | 2.65B |
| Net Income | 735.85M | 818.86M | 1.22B | 1.42B | 2.11B | 658.00M |
Balance Sheet | ||||||
| Total Assets | 30.54B | 32.03B | 29.63B | 29.76B | 28.86B | 31.02B |
| Cash, Cash Equivalents and Short-Term Investments | 1.13B | 1.72B | 1.86B | 2.28B | 2.46B | 2.97B |
| Total Debt | 7.35B | 7.54B | 6.69B | 6.16B | 5.52B | 8.02B |
| Total Liabilities | 14.83B | 16.36B | 14.10B | 14.48B | 14.01B | 16.40B |
| Stockholders Equity | 15.70B | 15.66B | 15.54B | 15.28B | 14.84B | 13.57B |
Cash Flow | ||||||
| Free Cash Flow | 269.17M | 621.65M | 449.00M | 889.00M | 2.15B | 1.07B |
| Operating Cash Flow | 1.89B | 2.56B | 2.85B | 3.26B | 4.56B | 2.27B |
| Investing Cash Flow | -1.64B | -1.92B | -2.69B | -2.90B | -1.67B | -137.00M |
| Financing Cash Flow | -995.21M | -791.83M | -206.00M | -860.00M | -3.40B | -481.00M |
Santos Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $21.91B | 8.27 | 14.70% | 3.49% | 42.49% | 2605.14% | |
72 Outperform | $51.60B | 11.07 | 14.90% | 2.31% | 18.28% | -5.35% | |
72 Outperform | $25.71B | 47.06 | 35.77% | 0.46% | 20.82% | 17.23% | |
70 Outperform | $17.74B | 18.33 | 8.27% | 1.90% | 6.17% | 57.64% | |
69 Neutral | $18.97B | 25.30 | 4.69% | 4.17% | -3.59% | -28.20% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
SSLZY
Santos
5.77
0.77
15.41%
DVN
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46.83
12.17
35.12%
OVV
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64.52
24.09
59.58%
TPL
Texas Pacific Land
369.40
68.38
22.72%
EXE
Expand Energy
96.57
3.37
3.62%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.