Here's how the Santos share price is responding to today's production results

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant

The Santos Ltd (ASX: STO) share price has given back some modest earlier gains and is currently edging lower.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy company closed yesterday trading for $7.72. In morning trade on Thursday, shares are changing hands for $7.71, down 0.1%.

For some context, the ASX 200 is up 0.4% at this same time.

Here’s what investors are mulling over today.

Santos share price wobbles amid quarterly revenue decline

The Santos share price has dipped into the red following the release of the company’s first-quarter update for the three months ending 31 March (Q1 2024).

Santos reported sales revenue of US$1.4 billion for the quarter, down 6% from Q1 2023.

Production of 21.8 million barrels of oil equivalent (mmboe) was down 7% year on year, with production impacted by severe weather events and planned maintenance activities.

Still, Santos achieved strong free cash flow from operations of US$692 million.

The company noted that its Bayu-Undan asset is continuing to produce, with gas being delivered into Australia’s domestic market.

And its Barossa Gas Project is now more than 70% complete while the Pikka Project was 47% complete as at 31 March.

What did management say?

Commenting on the results failing to lift the Santos share price today, CEO Kevin Gallagher said, “The first quarter brought strong free cash flow which provides a solid foundation for the year ahead.”

As for Santos’ development projects, Gallagher added:

I am very pleased that Barossa pipelaying activities are now almost complete and all other Barossa activities are progressing well with first gas expected in the third quarter 2025.

The Pikka project has made excellent progress over the winter months in Alaska and is on track for first production in 2026.

Barossa and Pikka are world-class projects that will be transformative for Santos and set the company up with long-term, stable cash flows for the next 10-15 years at least.

On the ESG front Santos is moving ahead with its carbon capture and storage (CCS) project. Its Moomba project was reported to be 85% complete at the end of the quarter.

“Our Moomba CCS Project is on track for first injection of CO2 this year and will be a game-changer for decarbonising our own operations,” Gallagher said.

The project also presents opportunities for the company to decarbonise services to customers in hard-to-abate sectors like steel, cement and aviation.

Santos share price snapshot

The Santos share price has been moving higher over the past six weeks amid a rising oil price. That sees the ASX 200 energy share up 7% over 12 months.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.