Sydney, Jan 30, 2026, 17:05 AEDT — Trading after hours.
- Santos shares ended the day 2.5% higher, closing at A$7.01
- Queensland selected a Santos unit along with Drillsearch as preferred tenderers for three gas exploration blocks
- Attention now turns to policy decisions on east coast gas and Santos’ earnings report due February 18
Santos Ltd (ASX:STO) shares ended Friday at A$7.01, up 2.5%, after fluctuating between A$6.92 and A$7.08. Queensland named Santos QNT and Drillsearch Energy as preferred tenderers for three gas exploration blocks near the Queensland–South Australia border. Dale Last from Queensland described the move as a sign the state remains “open for business.” Santos executive Brett Darley said the new acreage would “unlock new supply for Australian homes and businesses.” Investing.com
The timing is crucial as east coast gas policy tightens, with Canberra set to mandate that between 15% and 25% of gas from Queensland’s three LNG export projects be reserved for domestic use starting in 2027. Santos runs Gladstone LNG, while Origin Energy leads Australia Pacific LNG, and Shell heads Queensland Curtis LNG—Queensland’s other key exporters. The Australian Energy Market Operator has flagged possible supply shortfalls later this decade.
Investors have their sights set on Santos’ full-year results for the period ending Dec. 31, scheduled for release on Wednesday, Feb. 18, along with a webcast briefing, the company noted in its quarterly report. Santos forecasted production for 2026 between 101 million and 111 million barrels of oil equivalent—a metric that blends oil and gas volumes—up from 87.7 million in 2025.
“Preferred tenderer” status doesn’t guarantee gas in the pipeline. It just gives a company priority on acreage. Whether anything actually emerges depends on work programs, approvals, and the drill bit.
Santos is moving to prove its capabilities. This week, the company loaded the first LNG cargo from Barossa onto the Kool Blizzard, bound for Japan’s Sakai terminal. CEO Kevin Gallagher described it as “an outstanding achievement,” noting Barossa came online roughly six months after the planned start and stayed within the original budget.
Friday’s action unfolded against the backdrop of the Barossa milestone. Traders have zeroed in on those initial cargoes as a clear indicator: either the project is up and running, delivering product, or it remains nothing more than a concept on a presentation slide.
There’s a catch, as usual. Holding exploration acreage doesn’t ensure a steady commercial supply. Plus, if domestic reservation rules tighten, it could throw off the economics for exporters depending on Queensland gas.
Price risk poses a significant challenge. Santos is still vulnerable to fluctuations in oil and LNG prices, which can overshadow local policy news in just one trading session.
The next major milestone arrives on Feb. 18, when Santos releases its full-year results and answers investor queries about production, spending, and its strategy for adapting to the new domestic gas regulations.
