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    How Early PNG LNG Debt Repayment And Mahalo Exit At Santos (ASX:STO) Has Changed Its Investment Story

    Simply Wall St·01/08/2026 10:26:06
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    • In late 2025, Santos repaid its PNG LNG project finance facility around six months ahead of schedule and agreed to sell its 42.86% operated interest in the Mahalo Joint Venture to Comet Ridge Ltd, marking two significant portfolio and balance sheet moves.
    • These actions suggest Santos is prioritising earlier debt reduction and portfolio reshaping, choices that could influence its future capital allocation and project focus.
    • We’ll now explore how Santos’ early PNG LNG debt repayment affects its existing investment narrative built around cash flow and project growth.

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    Santos Investment Narrative Recap

    To own Santos today, you need to believe its LNG and gas portfolio can convert existing assets and projects into resilient cash flows while managing large project and decommissioning commitments. The early PNG LNG debt repayment and Mahalo sale strengthen the balance sheet but do not materially change the near term picture, where project execution risk on developments like Barossa and Pikka still looks like the key catalyst and the biggest operational risk.

    The most relevant recent development here is the failed A$28.8 billion takeover proposal from the ADNOC led consortium. With that potential liquidity event off the table, investors are again focused on Santos as a stand alone producer, where progress on project delivery and funding, and any further portfolio reshaping, are likely to be watched closely as drivers of sentiment.

    But while these steps may appear reassuring, investors should be aware that concentrated exposure to politically and environmentally sensitive regions can still...

    Read the full narrative on Santos (it's free!)

    Santos' narrative projects $6.9 billion revenue and $1.6 billion earnings by 2028. This requires 9.6% yearly revenue growth and roughly a $0.6 billion earnings increase from $1.0 billion today.

    Uncover how Santos' forecasts yield a A$7.53 fair value, a 27% upside to its current price.

    Exploring Other Perspectives

    ASX:STO 1-Year Stock Price Chart
    ASX:STO 1-Year Stock Price Chart

    Six fair value estimates from the Simply Wall St Community span roughly A$7.30 to A$39.43 per share, showing how far apart individual views can be. Against this wide range, the ongoing need to fund large capital projects and manage associated execution risk may weigh heavily on how you think about Santos’ ability to sustain future cash flows, so it is worth exploring several of these perspectives before deciding where you sit.

    Explore 6 other fair value estimates on Santos - why the stock might be worth over 6x more than the current price!

    Build Your Own Santos Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.