Santos Limited · ASX:STO

Santos — Investor Day (December 2009)

51 slides from Santos's investor day presentation, Dec 10, 2009

  1. Slide 1: Amended 2009 Investor Presentation

    For personal use only Media enquiries Investor enquiries Matthew Doman Andrew Nairn +61 8 8116 5260 / +61 (0) 421 888 858 +61 8 8116 5314 / +61 (0) 437 166 497 matthew.doman@santos.com andrew.nairn@santos.com 10 December 2009 Amended 2009 Investor Presentation Santos today released an amended 2009 i

  2. Slide 2: 2009 Investor Seminar: Delivering Transformational Growth

    For personal use only 2009 Investor Seminar Delivering Transformational Growth 9 December 2009 1 Disclaimer & Important Notice 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 reflect

  3. Slide 3: Our View of Energy World Is Unchanged

    Our View of Energy World Is Unchanged For personal use only Fundamentally  Unprecedented Asian economic growth driving energy demand  Rising CO2 emissions  Security of supply becoming increasingly important To meet energy needs while reducing emissions…  Gas must have an increasing share of the

  4. Slide 4: A Warming World Needs More Gas

    A Warming World Needs More Gas For personal use only Global warming could reach as high as 7 degrees by the turn of the century if greenhouse gases grow unabated The Copenhagen Diagnosis Nov 2009* 400 1769: James Watt’s CO2 concentration (ppm) 350 steam engine marks Industrial Revolution 300 250 200

  5. Slide 5: Gas is an Underutilised Fuel for Power Generation

    Gas is an Underutilised Fuel for Power Generation in China, India and Australia For personal use only Power Generated from Natural Gas (%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% M nd Au ny Th re a Ca ia Ca sia lia a UK n y NZ US Ge ea da ni al in pa o d a la ra na ay r or ap Ch It In rm Ko Ja ai st

  6. Slide 6: China LNG Factor: How Big Ultimately?

    China LNG Factor: How Big Ultimately? For personal use only Qinhuangdao LNG  Currently 3 operating LNG Dalian LNG Caofeidian LNG receiving terminals at (Tangshan) Guangdong, Fujian and Shandong LNG Shanghai with a total capacity of 9.6mtpa plus Rudong LNG (Jiangsu) Wuhaogou peaking terminal (0.5mtp

  7. Slide 7: Continue to See Strong Long Term LNG Pricing

    Continue to See Strong Long Term LNG Pricing For personal use only Asian Term Prices $18 Late 2006  Recent contracts $16 2008-09 point to strong underlying demand Ex-ship LNG Price ($/MMBtu $14  Pricing reflects new Ex-Ship LNG Price ($/MMBtu) US$12.40/MMBtu $12 Oil Parity Mid 2006 supply-demand e

  8. Slide 8: The Santos Strategy

    The Santos Strategy For personal use only Using quality assets, Santos will safely deliver: Base business  Eastern Australia: Margin growth and resource conversion  Indonesia: Established business with incremental growth  WA: Growing a material domestic gas business LNG growth  GLNG: The leading

  9. Slide 9: Which We are Commercialising

    Which We are Commercialising For personal use only 1,500  Proven and probable 2P Reserves (mmboe) 1,000 CAGR = 12% (2P) reserves exceed 1 billion barrels of oil equivalent  Management team 500 focused on continuing track record of growing 2P reserves 0 2004 2005 2006 2007 2008 2008 with PNG LNG Ba

  10. Slide 10: Twin Themes Of Strategy

    Twin Themes Of Strategy For personal use only Twin themes for shareholder value creation Building a better base business Delivering transformational growth 17 Delivering Without Compromising Safety 40% reduction in TRCFR during 2009 Santos TRCFR performance (Employees & Contractors) 10 8 6 TRCFR 4 3

  11. Slide 11: The Delivery Model

    The Delivery Model For personal use only Corporate Centre Disciplines Business Units Strategy, Finance, Technical WA & NT Public Affairs & Ray Betros John Anderson Investor Relations Peter Wasow Eastern Australia Exploration Mark Macfarlane Legal, Corporate Trevor Brown Development & Asia Pacific Co

  12. Slide 12: Eastern Australia Business Unit

    For personal use only Eastern Australia Business Unit Mark Macfarlane Vice President, Eastern Australia 21 Eastern Australia – The Next 40 Years Today’s pioneers capitalising on gas demand growth for the next 40 years Opening up market channels Reserves growth Cost and reliability and extension impr

  13. Slide 13: Demand for Eastern Australia Gas

    Demand for Eastern Australia Gas For personal use only Demand will nearly triple within 10 years… 2400 2000 Planned 1600 LNG Projects PJ/a 1200 800 Carbon driven fuel switching 400 10 Year Historic Average 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: AEMO, EnergyQuest, Santos, Company

  14. Slide 14: Reports of the Cooper's Death are Greatly Exaggerated

    Reports of the Cooper’s Death are Greatly Exaggerated For personal use only Cooper Gross Reserves and Unrisked Resource Potential Conventional Reserves/Resources Aspirational 75% 2P Recovery Factor 2,866 PJ Cooper infill 2P Current Produced 6,317 PJ Booked Contingent Resources 1,584 PJ 2P Reserves 1

  15. Slide 15: Reports of the Cooper's Death are Greatly Exaggerated

    Reports of the Cooper’s Death are Greatly Exaggerated For personal use only Gross Unrisked Resource Potential Moomba Unconventional Resources Developed TOOL DARA Booked Contingent Conventional Resources 4,750 PJ Shale ROSE Undeveloped EPSI Gas MTRE Unconventional Gross gas thickness ~1600 feet Tight

  16. Slide 16: Delivering Sanctioned Projects - Henry

    Delivering Sanctioned Projects - Henry For personal use only Leveraging Casino infrastructure to add reserves and production  Henry Project (50%, operator)  Otway Basin, Victoria  Sub-sea tie back to existing Casino infrastructure  Offshore installation vessels mobilised  Start-up 1H 2010  2P

  17. Slide 17: Oil Production

    Oil Production For personal use only Significant oil opportunity remains in the basin  2009 delivery in line with Cooper Oil Drill Target Selection forecast, notwithstanding 250 Initial Rate, bopd 2008 2010 200 reduced drilling activity Forecast 150  4 well Charo campaign 100 2007 2009 exceeded ex

  18. Slide 18: Production Cost & Reliability Improvement

    Production Cost & Reliability Improvement For personal use only Contemporary performance achieved through implementing proven systems as well as upgrading asset condition  Long term benefits through Maintenance Spend/Downtime reliability improvement 130 20  Investing in maintenance in 120 2010 110

  19. Slide 19: Western Australia & Northern Territory

    For personal use only Western Australia & Northern Territory John Anderson Vice President, Western Australia & Northern Territory 35 Western Australia and Northern Territory WA & NT Business Unit is focused on two key themes… 1. Building a leading domestic gas business in Western Australia 2. Maximi

  20. Slide 20: Strong Base with Growth Opportunities

    Strong Base with Growth Opportunities For personal use only Upside Likely Sanctioned Producing Potential Sanction Carnarvon NFE Spar/Halyard Reindeer John Brookes Domestic Hub growth New gas hub Upside Gas playing out Significant portfolio upside with shallow water, Market opportunity – Accessing in

  21. Slide 21: Hub-led Strategy

    Hub-led Strategy For personal use only Santos supplies gas via one of two existing hubs and one new hub under construction… Reindeer Focused NFE John Brookes Spar / Halyard Varanus Is. East Spar Devil Creek Legend …with focused NFE in shallow water close Santos acreage Gas pipeline to existing hubs

  22. Slide 22: Hub 2: Devil Creek/Reindeer

    Hub 2: Devil Creek/Reindeer For personal use only Devil Creek / Reindeer – Reindeer new gas hub  220 PJ YE 08 2P Reserves  Creation of 3rd WA gas hub  Under development – first gas Q4 2011  45% working interest Focused NFE  Shallow water offshore platform 45kms south west of Dampier  Two train

  23. Slide 23: Bayu Undan / Darwin LNG

    Bayu Undan / Darwin LNG For personal use only  Santos’ first producing LNG asset  2nd largest equity participant and only Australian participant (11.4%)  79mmboe YE 08 2P Reserves  Bayu Undan - producing ~1.1bcf raw gas per day (gross) - Approximately 103,000 bbl/d liquids (gross)  DLNG 3.5mpta

  24. Slide 24: Northern Australia LNG

    Northern Australia LNG For personal use only Exploration success… Montara Legend Crux Santos acreage Argus Territory of Asmore & Oil field WA-274-P Cartier Islands Gas field WA-410-P Ichthys WA-274-P Poseidon WA-274-P North Concerto Cornea Echuca Prelude Shoals Torosa Ichthys Caswell Burnside WA-411

  25. Slide 25: Exploiting Other Assets

    Exploiting Other Assets For personal use only Carnarvon late life producers:  1.9 mmboe YE 08 2P Reserves Thevenard Island - Producing asset - 35.71% working equity Legendre - Producing asset - 22.56% Working equity Other Assets: Jabiru Challis - Producing asset - 10.31% Working equity Mereenie and

  26. Slide 26: Asia Pacific Business Unit

    For personal use only Asia Pacific Business Unit Martyn Eames Vice President, Asia Pacific 49 The Santos Strategy & Asia Pacific Leverage Asia’s growing energy needs to develop material & sustainable exploitation focused businesses Base business  Eastern Australia: Margin growth and resource conver

  27. Slide 27: Asia Pacific – Vision & Strategy

    Asia Pacific – Vision & Strategy For personal use only Leverage Asia’s growing energy needs to develop material & sustainable exploitation focused businesses  Deliver base business safely and cost effectively  Execute key projects  Focused growth primarily through exploitation in proven fairways

  28. Slide 28: Madura Offshore PSC

    Madura Offshore PSC For personal use only Maleo performing beyond expectation; incremental growth from Peluang  Maleo - Production start-up 29 Sept. Peluang-1 2006 Maleo Madura Island - Gross gas production ~ 110 mmscf/d Surabaya - Reserve upgrade at end 2009 Madura forecast Grati Offshore PSC Proc

  29. Slide 29: Papua New Guinea LNG

    Papua New Guinea LNG For personal use only PNG LNG Project FID approval signals next step in LNG growth strategy  FID approved on 8 December  2 SPAs executed, remaining two expected to be executed by early-2010  Financial Close early in 2010  First sales are targeted for 2014  Initial equity de

  30. Slide 30: Vietnam

    Vietnam For personal use only Attractive oil project providing medium term growth with upside  Chim Sao Project reshaped for value China Vietnam  Revised Field Development Plan Burma submitted to government for approval Laos  Principal contracts covering EPCI and FPSO lease executed in October So

  31. Slide 31: Kyrgyz Republic

    Kyrgyz Republic For personal use only Potential for medium term exploitation business. Key tests in 2010 & 2011  Leading acreage position Kazakhstan Bishkek  2D seismic complete Talas  Shallow prospects drilled in Kyrgyz Republic Naryn 2009 secured prospective Uzbekistan Jalal-Abad acreage and de

  32. Slide 32: GLNG

    For personal use only GLNG Rick Wilkinson President, GLNG and Queensland 61 Overview We have the energy to deliver… ̶ Two trains The Project ̶ Milestones achieved ̶ Comprehensive CSG program Operational ̶ Reserves growth ̶ Technology innovation Excellence & ̶ Scalability Innovation ̶ Ramp gas strate

  33. Slide 33: The Project – Two Trains

    The Project – Two Trains For personal use only Upstream Pipeline LNG Plant Shipping Customers Fairview Arcadia Train 1 3.6mtpa FOB 1 Train: Roma 600 TJ/d CSG CSG LNG Portfolio 2 Trains: Gas 1,200 TJ/d Train 2 7.2mtpa FOB Storage 63 The Project – Milestones Achieved GLNG is meeting key milestones … 

  34. Slide 34: The Project – Milestones Achieved

    Operational Excellence and Innovation For personal use only GLNG has a comprehensive program to prove up reserves and deliverability Since January 2008 we have: Well Production Comparison March 2009 vs October 2009  Nine rigs operating 12 120 continuously Gas Production Rate (TJ/d) - four purpose-b

  35. Slide 35: Operational Excellence and Innovation

    Operational Excellence and Innovation For personal use only Roma reserve growth 1P 2P 3P 2008 corehole 2008 pilot well Reserve Position 0 10 km Year End 2008 Operational Excellence and Innovation Roma reserve growth 1P 2P 3P 2008 corehole 2008 pilot well 2009 corehole 2009 pilot well Reserve Positio

  36. Slide 36: Operational Excellence and Innovation: Roma reserve growth

    Operational Excellence and Innovation For personal use only Technology innovation will realise value and opportunities Pad Drilling  2-9 wells/pad Gas to processing station Water to plantation/crops  Reduced rig moves  CAPEX and OPEX savings  Facility simplification  Economies of scale  Operat

  37. Slide 37: Operational Excellence and Innovation: Technology

    Operational Excellence and Innovation For personal use only Technology innovation will realise value and opportunities Approx 150 TJ/d Gas withdrawal Gas injection Approx 200 TJ/d Storage  Gas supply optimisation Gas export Gas input  Ramp management Gas withdrawal Gas injection ~150 TJ/d ~200 TJ/

  38. Slide 38: Operational Excellence and Innovation: Ramp Gas Strategy

    Operational Excellence and Innovation For personal use only Depleted conventional reservoirs suitable for storage … Storage wells Queensland Proposed pipeline Gladstone Roma Arcadia Fairview Wallumbilla Roma Legend Santos/Petronas Gas field JV permits Gas pipeline 25km Other Santos Proposed acreage

  39. Slide 39: Operational Excellence and Innovation: Storage

    The Right People For personal use only PETRONAS is the right partner for Santos …  Operator of MLNG, Bintulu, Sarawak  25 years’ supply LNG to Asia  3rd largest LNG producer in the world  One of the largest owner-operator LNG fleets in the world …with unrivalled skill and experience 75 The Right

  40. Slide 40: The Right People

    The Right People For personal use only We have the energy! 77 Beyond Train 2 T5 T4 T1 T2 T3 0 500 metres

  41. Slide 41: The Right People

    For personal use only Concept Concept Pre- Project Screening Definition Commitment Sanction RFSU Close out Design Select Gate Gate Gate Gate Gate Gate Gate Gate Technical Ray Betros Executive Vice President, Technical 79 Technical Excellence Outstanding project delivery achieved by the integration o

  42. Slide 42: Technical Excellence

    Gunnedah Basin – Next Major Play in Coal Seam Gas For personal use only Basin master position with >50 tcf prospective potential…  ESG operated areas Wilga Park Power Station (STO 47.65%)* PEL PPL 3 Narrabri New PAL 2 South Wales - Net 2P reserves** - 211 PJ 434 PEL 238 Gunnedah - Net 3P reserves**

  43. Slide 43: Gunnedah Basin – Next Major Play in Coal Seam Gas

    Proposed Shaw River Power Station For personal use only Targeting FID 2H 2010  Power generation consistent Proposed Shaw River with commercialisation of Power Station Site Santos’ extensive gas Mortlake Willatook Victoria resources Camperdown Orford Terang  SRPS now targeting FID in Koroit 2nd hal

  44. Slide 44: Proposed Shaw River Power Station

    Exploration Performance – Conventional For personal use only Exploration Capex (A$mm) Cumulative Mean Resource Adds (mmboe) 300 500 Peluang, Burnside 250 Netherby, Frigate Deep, Ichthys North 400 Magnama, Reindeer (Gnu) 200 Barossa, Chim Sao, Wortel 300 150 200 Henry, Caldita 100 100 50 Oyong, Maleo

  45. Slide 45: Exploration and Subsurface

    Exploration Strategy For personal use only  Applying subsurface skills on captured CSG opportunities Queensland  CSG exploration, appraisal and development is benefiting from the Denison application of conventional Trough Dawson River Bowen Basin subsurface skills and technology Fairview Scotia co

  46. Slide 46: Exploration Performance – Conventional

    Exploration Spend For personal use only A$mm Exploration Spend (A$mm) 300 250 CSG Conventional 200 150 100 50 0 2008 2009 2010 2011 2012 % Exploration % of Total Capex 25 20 15 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 89 Spar Deep  Spar Deep gas opportunity, located beneath the Spar

  47. Slide 47: Exploration Strategy

    Alabuka West – Kyrgyz Republic For personal use only 2D Seismic Profile  Alabuka West oil opportunity, located in the Kyrgyz Republic  Northern Fergana Basin, Nanai Permit  Targeting a structural trap of Palaeogene age reservoirs  Resource upside of greater than 50mmboe Line 1089275 Schematic Cr

  48. Slide 48: Exploration Spend

    For personal use only Outlook and Funding Peter Wasow Executive Vice President & Chief Financial Officer 93 Delivering Transformational Growth Asset quality is transformed… 100% 75% Mature assets Production 50% Long life assets on plateau John Brookes, Reindeer, with high 25% free cash Kipper, Otway

  49. Slide 49: Alabuka West – Kyrgyz Republic

    Building a Better Base Business For personal use only Base business CAPEX excluding exploration and LNG 1200 1000 800 $m 600 400 200 0 2008 2009 2010 2011 2012 EA WA&NT Asia 95 Production and sales grow to record levels Sanctioned projects drive production higher: 7% CAGR 2009-2012 Production and Sa

  50. Slide 50: Outlook and Funding

    Funding Growth For personal use only  Objective is to minimise equity employed while maintaining current investment grade credit rating - Prudent targets ensure access to debt capital through the cycle  Implications: - Maximise debt consistent with rating, allowing for uncertainty - Lump sum contr

  51. Slide 51: Delivering Transformational Growth

    For personal use only David Knox Chief Executive Officer & Managing Director 99 Our strategy delivers…  Performance from the base business  LNG growth - LNG at more than 50% of revenue - With equity in 4 LNG projects  Focussed growth in Asia Thereby realising our vision to be a leading Australian

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