Slide 1: 2012 Half-year results
For personal use only 2012 Half-year results 17 August 2012
Slide 2: Disclaimer & important notice
Disclaimer & important notice For personal use only This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range
Slide 3: First-half overview
First-half overview For personal use only Safety: TRCFR 4.0 Highest first-half production in three years: 25.4 mmboe Underlying profit up 20% to $283 million PNG LNG and GLNG on track for first LNG in 2014 and 2015 respectively The capital cost estimate for the GLNG project was increased t
Slide 4: Safety performance
Safety performance For personal use only A balanced focus on personnel and process safety Personnel safety Process safety TRCFR performance Safety critical compliance long-term trend (employees and contractors) 99.8% 100% Total recordable case frequency rate 95% (per million hours worked) 7 90% 6 85
Slide 5: 2012 Half-year results - Andrew Seaton, CFO
For personal use only 2012 Half-year results Andrew Seaton CFO
Slide 6: Underlying half-year net profit up 20%
Underlying half-year net profit up 20% For personal use only 2012 Half-year result Change on 2011 first-half Production 25.4 mmboe 11% Sales revenue $1,493 million 27% EBITDAX (excluding asset sales) $876 million 18% Net profit after tax $262 million 48% Underlying net profit $283 million 20% Operat
Slide 7: Underlying net profit up 20%
Underlying net profit up 20% For personal use only Half-year NPAT and underlying NPAT $million 600 504 500 400 304 283 300 280 262 236 198 210 200 102 95 100 0 1H 2008 1H 2009 1H 2010 1H 2011 1H 2012 NPAT Underlying NPAT Half-year underlying profit up 20% due to higher liquids prices and volumes,
Slide 8: Net profit reconciliation
Net profit reconciliation For personal use only Net profit after tax $million 700 84 (52) (27) 72 (31) 600 7 (271) 504 500 400 (24) 300 262 200 100 0 1H 2011 Prices and Sales Production DD&A E&E Net finance Gain on sale Other 1H 2012 foreign volume costs costs and exchange impairment 8
Slide 9: Production costs up as new assets on-line
Production costs up as new assets on-line For personal use only Production costs $million 600 543 556 532 537 500 400 286 266 261 296 300 200 335 257 266 276 260 100 0 2008 2009 2010 2011 2012 1H 2H Higher production costs due to new assets on-line, higher maintenance costs and Bayu-Undan/Darwin L
Slide 10: Eastern Australia
Eastern Australia For personal use only Cooper Basin recovering from flood impacts; early success with shale gas program Production EBITDAX Steady production of 10.9 mmboe, (mmboe) ($million) with 26% oil and liquids 316 312 EBITDAX in line with first half 2011; higher production costs due to 10
Slide 11: Western Australia & Northern Territory
Western Australia & Northern Territory For personal use only Growth driven by record Carnarvon gas production in the first half Production EBITDAX (mmboe) ($million) Production increased by 23%, 386 driven by strong gas production at 368 John Brookes and Reindeer EBITDAX up, driven by strong 9.2
Slide 12: Asia Pacific
Asia Pacific For personal use only Chim Sáo drives higher oil production and EBITDAX Production higher due to Chim Sáo Production EBITDAX (mmboe) ($million) and Wortel on-line, offset by lower 174 Maleo gas production due to the favourable price review EBITDAX up 270%, with oil 4.4 3.9 comprisin
Slide 13: Operating cash flow remains strong
Operating cash flow remains strong For personal use only Operating cash flow $million 1,600 1,385 1,273 1,253 1,155 1,200 759 572 736 800 656 400 728 626 681 499 537 0 2008 2009 2010 2011 2012 1H 2H Half-year operating cash flows up 7% due to higher sales receipts, partially offset by higher opera
Slide 14: Capital expenditure
Capital expenditure For personal use only Capital expenditure $million (includes capitalised interest) 4,000 3,088 3,000 1,679 2,000 1,882 1,629 1,509 1,023 923 745 1,000 1,409 1,509 706 764 859 0 2008 2009 2010 2011 2012 1H 2H First-half capex higher as investment in growth projects continues 2
Slide 15: $6.8 billion of funding capacity
$6.8 billion of funding capacity For personal use only Balance sheet capacity to fund execution of business strategy and minimise financing risk Available liquidity Debt maturity profile A$ billion A$ million 8 1,800 7 1.2 1,500 6 0.8 5 1.9 1,200 4 900 3 2.9 600 2 300 1 0 0 2012 2014 2016 2018 2020
Slide 16: Moomba-191 shale well, Cooper Basin
For personal use only Moomba-191 shale well, Cooper Basin Moomba-191 shale well James Baulderstone EA Vice President
Slide 17: Focused execution of unconventional strategy
Focused execution of unconventional strategy For personal use only Objective of Moomba-Big Lake REM shale appraisal: achieve gas flow to surface Core acquisition, logs, minifrac and analysis Dedicated vertical shale well (Moomba-191) Specialised shale-specific fracture stimulation with micro-
Slide 18: Australia's first commercial shale well
Australia’s first commercial shale well For personal use only Moomba-191 flow at stabilised Moomba-191 Flowback gas rate of 2.6 mmscf/d Flow-back commenced 27th July Two-week flow-back completed with measured dry gas stabilised rate of 2.6 mmscf/d at line pressure Assessing all technical data
Slide 19: Multiple targeted projects continuing in 2012 and 2013
Multiple targeted projects continuing in 2012 and 2013 For personal use only Santos will continue to execute its unconventional strategy, whilst continuing to apply learning to optimise target selection and well design Targeted projects addressing unconventional play sweet spots and technology: −
Slide 20: GLNG
For personal use only GLNG
Slide 21: Dual channel gas strategy
Dual channel gas strategy For personal use only LNG markets Dual channel strategy Export channel Domestic channel Strong Focused Australian Asian A leading base growth energy company in Australia and Asia A leading gas producer in high-growth markets 21
Slide 22: Creating the export channel for Santos
Creating the export channel for Santos For personal use only Dual channel strategy (LNG and domestic) creates a new legacy asset for Santos and revitalises the Cooper Basin Strategy accesses higher gas prices... ...and accelerates reserves build Gas prices Santos east coast 2P+2C sales A$/GJ PJ gas
Slide 23: Creating value for Santos shareholders
Creating value for Santos shareholders For personal use only Material value Sell-down of 70% interest in GLNG to PETRONAS, Total and KOGAS captured pre-FID generated $3.3 billion in proceeds pre-FID Binding 20-year off-take agreements with quality partners in Strong LNG PETRONAS and KOGAS off-ta
Slide 24: Compression capacity and gas purchases
Compression capacity and gas purchases For personal use only Investment in upstream facilities provides 890 TJ/day of compression capacity by end 2015; gas purchases to date provide a further 240 TJ/day GLNG net share compression capacity at the end of 2015 and gas purchases TJ/day Compression capac
Slide 25: Fairview and Roma CSG fields
Fairview and Roma CSG fields For personal use only Consistently strong flow rates from Fairview wells Roma pilots in line with expectations Fairview Roma GLNG ownership ~79% 100% Total CSG wells 345 comprising: 105 comprising: drilled to end June 70 appraisal 30 appraisal 2012 275 development
Slide 26: Roma field geology well understood
Roma field geology well understood For personal use only Santos has a long history operating in the Roma area Surat Basin Coal - Gas Content Fairway Conventional gas >50 years CSG pilots >8 years Geological trend well understood − gas content − thickness − permeability On trend with APLNG an
Slide 27: Drilling rigs and wells
Drilling rigs and wells For personal use only Drilling capacity secured to meet forecast well requirements Around 1,000 wells on-line by end-2015 out of a total well stock of 1,3001 450 wells drilled to end June 2012 Target of 70 wells in 2H 2012 250-300 wells per annum in 2013-15 Expect t
Slide 28: Reserves and resources
Reserves and resources For personal use only GLNG has 8,800 PJ of dedicated reserves and resources Santos’ portfolio in eastern Australia contains another 10,000 PJ GLNG dedicated 2P+2C (PJ) Santos’ eastern Australia portfolio2 10,000 Surat/ Gladstone 8,000 Cooper Bowen Basins Brisbane Basin 6,000 1
Slide 29: On schedule for first LNG in 2015
On schedule for first LNG in 2015 For personal use only Upstream Pipeline LNG plant 450 wells drilled 420-km pipeline Construction on Curtis Sufficient drilling rig manufacture complete Island progressing on capacity to meet forecast Nine shipments received schedule well requirements in Gl
Slide 30: Curtis Island LNG site
Curtis Island LNG site For personal use only 9 July 2012 9 August 30 2011
Slide 31: PNG LNG
DN £ é We have the energy. PNG LNG
Slide 32: PNG LNG
PNG LNG For personal use only First LNG expected in 2014 on schedule Hides drilling commenced late July Piling, foundations and structural steel continue at Hides Earthworks at the Komo airfield continue and pavement is underway Offshore pipelay is complete Over half of the onshore pipelin
Slide 33: Summary
Summary For personal use only Good first half with base business performing well Sanctioned projects on track Crown-1 well in the Browse Basin spudded Moomba-191 success with well to be tied- in to produce Australia’s first commercial production of gas from a shale well Committed to safe d
Slide 34: 2012 Half-year results August 2012
For personal use only 2012 Half-year results 17 August 2012 34
Slide 35: Reference slides
For personal use only Reference slides
Slide 36: Clean Energy legislation
Clean Energy legislation For personal use only Government introduced the price of $23 per tonne of CO2e on 1 July 2012 Requires Santos to surrender one carbon permit for each tonne of CO2e emitted from its liable facilities The cost of carbon for Santos from 1 July 2012 to 30 June 2013 is fore
Slide 37: Production up 11% as new projects on-line
Production up 11% as new projects on-line For personal use only Production mmboe 30 27.6 26.7 25.4 25 24.2 22.9 20 15 10 5 0 1H 2008 1H 2009 1H 2010 1H 2011 1H 2012 2012 half-year production up 2.5 mmboe, primarily due to first production from Chim Sáo and record Carnarvon gas production following
Slide 38: Sales revenue increased by 27%
Sales revenue increased by 27% For personal use only Half-year sales revenue $million 1,600 1,493 1,384 1,400 1,174 1,200 1,091 1,024 1,000 800 600 400 200 0 1H 2008 1H 2009 1H 2010 1H 2011* 1H 2012 Oil Sales gas, ethane and LNG Condensate and LPG Sales revenue up 27% driven by higher oil sales vo
Slide 39: Significant items after tax
Significant items after tax For personal use only Half-year Half-year $million 2012 2011 Net profit after tax 262 504 Add/(deduct) significant items Net gains on asset sales (6) (246) Net impairments 22 (9) Other 5 (13) Underlying net profit 283 236 2012 half-year net impairments primarily relate
Slide 40: All 2012 guidance unchanged
All 2012 guidance unchanged For personal use only Item 2012 Guidance Production (mmboe) 51-55 Production costs ($m) 610-640 DD&A expense ($/boe) 15 Royalty related taxation expense1 80-100 ($m after tax) Capital expenditure (including $3.75 billion exploration & evaluation)2 1 Royalty related taxati
Slide 41: 2012 full-year sensitivities
2012 full-year sensitivities For personal use only Sensitivity Change NPAT impact A$m US dollar oil price +US$1/bbl +9 Gas price +10 cent/GJ +15 A$/US$ exchange rate +1 cent -8 41
Slide 42: 2012 exploration schedule
2012 exploration schedule For personal use only Santos Well name Basin / area Target Timing Interest % C&S, successful Tardrum Bowen CSG 50 CSG Beam-1 Carnarvon Gas 45 P&A Chim Sáo NW-1 Nam Con Son Oil 31.875 P&A Hoss-1 Carnarvon Oil 37.3 Drilling Crown-1 Browse Gas 30 Drilling Indonesia CSG South S
Slide 43: Contact information
Contact information For personal use only Head office Adelaide Andrew Nairn Group Executive Investor Relations Ground Floor, Santos Centre Level 10, Santos Centre 60 Flinders Street Direct: + 61 8 8116 5314 Adelaide, South Australia 5000 Email: andrew.nairn@santos.com GPO Box 2455 Adelaide, South Au