Santos (ASX:STO) is expected to trade higher as the XRG Consortium remains engaged and due diligence has been extended to Sept. 19, though clarity is still needed on risks of further extensions and dividend treatment, Jarden said in a Monday note.

The investment firm shared that the company reported total revenue of $2.66 billion, down 4% on the prior corresponding period, with underlying net profit after tax of $508 million, a 22% decline.

The company declared an interim dividend of $0.134, representing a 40% free cash flow payout ratio, while net debt stood at $4.9 billion and gearing at 23.7% as of June 30.

The firm shared key takeaways that the company extended exclusivity with the XRG Consortium as due diligence reveals no issues, Barossa is 98% complete with first gas imminent, and Pikka Phase 1 is over 91% complete, targeting first oil in Q1 2026.

The 2025 guidance remains unchanged, with production expected to be between 90 million and 95 million barrels of oil equivalent (boe), and sales volumes ranging from 92 million to 99 million boe.

The investment firm maintained Santos's overweight rating and its price target at AU$8.40.