Santos, Australia’s second-largest independent oil and gas producer, has revised its annual production forecast for fiscal 2025 downward, citing a software failure at its key Barossa project and ongoing delays in restoring flood-affected wells in the Cooper Basin. The company now expects production between 89 and 91 million barrels of oil equivalent (mmboe), compared to its previous forecast of 90 to 95 mmboe.
Barossa setback caused by two-week shutdown
The Barossa project, developed in partnership with South Korean energy company SK E&S and Japan’s JERA, experienced an unplanned two-week shutdown in September due to software issues impacting safety systems aboard the BW Opal floating production, storage and offloading unit (FPSO). While the ramp-up was affected, the company stated that the first shipment of liquefied natural gas (LNG) is still scheduled for the December quarter.
“Software issues interrupted operations on board, affecting the project timeline,” said Santos Managing Director and Chief Executive Officer Kevin Gallagher. The project represents an investment estimated between $4.5bn and $4.6bn, according to the company’s 2024 guidance.
Dozens of wells still offline in Cooper Basin
In the Cooper Basin, the aftermath of May’s flooding continues to hinder operations. Santos stated that 155 wells remain offline due to slower-than-expected receding water levels, prolonging disruptions into the fourth quarter. More than 200 wells were submerged during the initial flooding event.
Despite the delays, Gallagher said the broader impact remains limited and reaffirmed that production recovery is expected to improve by the end of the year. The company had already adjusted its forecast in the previous quarter due to these flood-related disruptions.
Revenue declines despite share rebound
Santos reported an 11% decline in third-quarter sales revenue, totalling $1.13bn, falling short of the $1.18bn consensus forecast by Visible Alpha. The company also lowered its annual sales volume forecast to 93–95 mmboe, down from a previous range of 92–99 mmboe.
Shares in the company closed up 0.8% at A$6.38 after rising as much as 1.7% earlier in the session, in line with gains on the benchmark S&P/ASX 200 index.
