Australia’s second-largest oil and gas producer, Santos, said on Monday it had achieved first oil from Phase 1 of its Pikka development project in Alaska, marking a key milestone in expanding its production portfolio in the United States.
The announcement lifted Santos shares by as much as 3.1% to their highest level since mid-April, outperforming a weaker Australian market as investors responded positively to expectations of stronger future output.
The Adelaide-based company said the Alaska project is expected to reach a production plateau of 80,000 barrels of oil per day by the third quarter of fiscal 2026, with initial revenue from oil sales anticipated within two to three months.
Analysts said the development comes at a favourable time amid elevated global oil prices, strengthening Santos’ growth outlook and supporting future earnings potential.
Craig Sidney, senior investment adviser at Shaw and Partners, described the production increase as significant, noting it could materially improve the company’s performance over the coming years.
Santos operates the Pikka project with a 51% ownership stake, while Spanish energy firm Repsol holds the remaining 49%.
The project’s progress follows Santos’ decision last month to maintain its annual production and sales forecasts despite weather disruptions and a temporary outage at one of its gas facilities affecting first-quarter operations.
The start of oil production at Pikka underscores Santos’ strategy to expand output capacity and strengthen its position in the global energy market amid sustained demand for crude supplies.