Slide 1: 2013 Half-year results
2013 Half-year results 16 August 2013
Slide 2: Disclaimer & important notice
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 reflected in these statements are reasonable, but they may be affected by a range of variables which cou
Slide 3: Safety performance
Safety performance Safety performance Fatality on Saxon CSG (employees and contractors) drilling rig 185 on Rate per million 23 June 2013 hours worked − Drilling operations 8 immediately stopped − Internal and external Total recordable case frequency rate (TRCFR) investigations conducted 6 Lost
Slide 4: Growth projects on track; record first-half sales revenue
Growth projects on track; record first-half sales revenue First-half production of 24.5 mmboe Record first-half sales revenue of $1.5 billion Net profit up 3% to $271 million All projects on schedule and capital cost estimates unchanged Fletcher Finucane first oil in May 2013 ahead of sche
Slide 5: 2013 Half-year results
PNG LNG 2013 Half-year results Andrew Seaton CFO
Slide 6: Transformation becoming reality
Transformation becoming reality Clear growth outlook to 2016 and beyond Production 2H 2013 Fletcher Finucane, Cooper infill growth 2014 Dua, Peluang, PNG LNG 2015 GLNG Revenues increasingly oil price linked Margin Clear evidence of rising domestic gas prices growth Benefits of falling
Slide 7: First half net profit up 3%
First half net profit up 3% 2013 Half-year result Change on 2012 first half Production 24.5 mmboe -4% Sales revenue $1,510 million 1% EBITDAX $844 million -4% Net profit after tax $271 million 3% Underlying net profit $251 million -11% Operating cashflow $629 million -13% Interim dividend 15 cents p
Slide 8: First half production of 24.5 mmboe
First half production of 24.5 mmboe Half-year production mmboe 30 26.7 25.4 2.4 24.2 24.5 22.9 2.3 2.1 2.0 2.1 20 20.1 18.6 18.0 18.8 17.8 10 4.2 3.4 3.0 4.5 4.4 0 1H 2009 1H 2010 1H 2011 1H 2012 1H 2013 Oil Sales gas, ethane and LNG Condensate and LPG First-half production down 4%, primarily due
Slide 9: Record first-half sales revenue
Record first-half sales revenue Half-year sales revenue $million 1,600 1,510 1,496 226 181 1,200 1,135 1,174 1,091 210 230 618 175 628 800 540 584 593 400 642 711 376 341 351 0 1H 2009 1H 2010 1H 2011 1H 2012 1H 2013 Oil Sales gas, ethane and LNG Condensate and LPG Record first-half sales revenue,
Slide 10: Production costs down 5%
Production costs down 5% First-half production costs down 5% primarily due to cost savings Production costs combined with statutory shutdowns in 1H 2012 (Bayu-Undan, Varanus $million Island) 800 688 2012 and 2013 production costs 12 adjusted for adoption of AASB 11 Joint Arrangements 600 537 556
Slide 11: Net profit up 3%
Net profit up 3% Half-year net and underlying net profit after tax $million 504 500 400 300 262 283 271 251 236 198 210 200 102 95 100 0 1H 2009 1H 2010 1H 2011 1H 2012 1H 2013 NPAT Underlying NPAT First-half net profit up 3% due to higher sales revenue combined with impairment reversals and lower
Slide 12: Operating cash flow of $629 million impacted by higher tax payments
Operating cash flow of $629 million impacted by higher tax payments Operating cash flow $million 1,800 1,648 1,500 1,273 1,253 1,200 1,155 929 572 900 736 656 600 681 719 629 300 537 499 0 2009 2010 2011 2012 2013 1H 1H 2H First-half operating cash flows 13% lower due to higher income tax payments
Slide 13: Capital expenditure of $2 billion driven by investment in GLNG and PNG LNG projects
Capital expenditure of $2 billion driven by investment in GLNG and PNG LNG projects Capital expenditure $million (includes capitalised interest) 4,000 3,359 3,069 3,000 1,854 1,660 GLNG $850m 2,000 1,882 EA $375m 1,557 PNG LNG $300m Exploration $190m 1,023 WA&NT $120m 793 Other Qld $75m 1,000 1,962
Slide 14: $4.8 billion of liquidity provides the capacity to fund the execution of our strategy
$4.8 billion of liquidity provides the capacity to fund the execution of our strategy Available liquidity Debt maturity profile A$ billion A$ million 6 2,000 Notes mature in 0.6 2070, with Santos 0.4 option to redeem in 1,500 2017 4 2.2 1,000 2 1.6 500 0 0 Cash Undrawn Undrawn Undrawn 2013 2015 2017
Slide 15: Delivering major projects
Train 1 propane condenser module in place on Curtis Island Delivering major projects David Knox Managing Director & CEO
Slide 16: Fletcher Finucane project has already produced over 1.5 million barrels of oil
Fletcher Finucane project has already produced over 1.5 million barrels of oil since 20 May 2013 First oil delivered ahead of schedule and only 16 months after the project was sanctioned Final cost of $470 million, 4% under budget Forecast average gross production rate of 15,000 bbl/day in the
Slide 17: Dua is over 55% complete and on track for first oil in first half of 2014
Dua is over 55% complete and on track for first oil in first half of 2014 Santos 31.875%, Premier Oil operator Located 17km north-east of Chim Sáo Three-well subsea tie-back to Chim Sáo FPSO Fabrication of equipment packages to be installed on the FPSO complete Development drilling to comm
Slide 18: Peluang is 22% complete and on track for first gas in first half of 2014
Peluang is 22% complete and on track for first gas in first half of 2014 Santos 67.5% and operator Located in the Maleo gas field, offshore East Java in Indonesia One-well tieback to the existing facilities at Maleo Procurement for long-lead items has been completed Fabrication of the well
Slide 19: PNG LNG is 90% complete and on track for first LNG in 2014
PNG LNG is 90% complete and on track for first LNG in 2014; commissioning gas expected in Q3 2013 Santos 13.5%, ExxonMobil 33.2% and operator Recent milestones include: − Drilling of the first four wells underway; the first two wells have been drilled to total depth and completed; third well dri
Slide 20: Construction at Hides is progressing to plan as equipment is delivered via Komo
Construction at Hides is progressing to plan as equipment is delivered via Komo Hides 20 Gas Conditioning Plant
Slide 21: LNG plant is transitioning from construction to commissioning
LNG plant is transitioning from construction to commissioning LNG plant 21 site, Caution Bay
Slide 22: GLNG is over 60% complete and remains on track for first LNG in 2015
GLNG is over 60% complete and remains on track for first LNG in 2015; US$18.5 billion capex maintained Santos 30% and operator 2013 milestones to date include: − Over 18 million work hours worked across the project by over 6,000 people − 119 wells spudded in the first half; on track to drill mor
Slide 23: CSG drilling – on target to drill more than 200 wells in 2013
CSG drilling – on target to drill more than 200 wells in 2013 with continued cost performance gains Nine drilling rigs and four completion rigs Drilled 119 wells in the first half of 2013, on target to drill over 200 wells by year end Average 2013 drilling and completion costs of $1.4 million
Slide 24: Upstream construction continues to ramp up at the Fairview and Roma hubs
Upstream construction continues to ramp up at the Fairview and Roma hubs Fairview 24 Hub 4
Slide 25: Pipeline on track for Q2 2014 completion; marine crossing tunnelling ahead of schedule
Pipeline on track for Q2 2014 completion; marine crossing tunnelling ahead of schedule Construction of 420-kilometre pipeline well underway − All private landholder approvals have been obtained − Clearing and grading is 84% complete − Stringing is 75% complete − 67% of the total pipeline length ha
Slide 26: Significant milestones in downstream construction
Significant milestones in downstream construction: first LNG tank roof raise, MOF complete, 25 modules delivered LNG jetty LNG tanks LNG Train261 Unloading at the MOF
Slide 27: Exploration
Jack Bates, Browse Basin Exploration David Knox Managing Director & CEO 27
Slide 28: Material exploration program in key basins
Material exploration program in key basins Nam Con Son Hon Khoai-1 Cooper Browse Basin unconventional 2012 Crown discovery REM shale Bassett West discovery Nappamerri Dufresne-1 drilling ahead Trough Carnarvon Basin Winchester discovery Bianchi discovery 28
Slide 29: Browse Basin – Crown and Bassett West successes unlock material play
Browse Basin – Crown and Bassett West successes unlock material play; Dufresne drilling ahead Crown gas–condensate Grande Dufresne-1 Bassett West discovery (Santos 30%) prospect discovery - 61 metres net gas pay in Jurassic-aged Montara, Plover and Malita sandstones Bassett West discovery (Santo
Slide 30: Carnarvon Basin - Winchester and Bianchi discoveries adjacent to key infrastructure
Carnarvon Basin - Winchester and Bianchi discoveries adjacent to key infrastructure Winchester discovery Winchester gas discovery Santos 75% and operator 58 metres of net gas pay in the Jurassic Angel and Triassic Mungaroo formations with excellent reservoir quality Multiple gas samples recove
Slide 31: Cooper unconventional
Cooper unconventional REM shale play Moomba-191 currently flowing at 2 mmscf/day Three follow-up vertical/horizontal Gaschnitz discovery pairs to further appraise the play Basin Centred Gas play Gaschnitz-1 well confirmed a continuous gas accumulation in the Nappamerri Trough Initial post fr
Slide 32: Summary
Train 1 construction, Curtis Island Summary David Knox Managing Director & CEO
Slide 33: 2013 first-half summary
2013 first-half summary Solid first half, expect stronger second half Fletcher Finucane first oil delivered ahead of schedule and under budget PNG LNG and GLNG projects on schedule; capital cost estimates unchanged Exploration success – four consecutive gas discoveries offshore Western Austr
Slide 34: Reference slides
PNG LNG jetty Reference slides
Slide 35: Eastern Australia – first half impacted by planned Cooper Basin maintenance
Eastern Australia – first half impacted by planned Cooper Basin maintenance; gas capacity build on track Production EBITDAX (mmboe) ($million) Production down 9% primarily due to 312 planned Cooper Basin maintenance and 10.9 natural field decline 9.9 256 Gas production rate increased as planned
Slide 36: WA&NT – Consistent EBITDAX contribution; Fletcher Finucane will drive stronger second half
WA&NT – Consistent EBITDAX contribution; Fletcher Finucane will drive stronger second half Production EBITDAX (mmboe) ($million) 9.4 393 Production in line with higher efficiency 9.2 378 and capacity at Bayu-Undan and higher volumes at Reindeer offset by lower Varanus Island Hub production EBITD
Slide 37: Asia Pacific – Consistent production and EBITDAX; growth projects on track
Asia Pacific – Consistent production and EBITDAX; growth projects on track Production EBITDAX (mmboe) ($million) Production in line with higher Chim Sáo, 4.4 4.4 174 170 Oyong and Wortel offset by lower Maleo nominations EBITDAX also in line with higher oil sales volumes offset by higher product
Slide 38: Third party product sales revenue in line with 1H 2012
Third party product sales revenue in line with 1H 2012, despite lower sales volumes Higher volumes of third party crude offset by lower volumes of third Third party sales volumes party gas primarily due to Longtom (mmboe) outage 6 Third party products sales revenue 5.2 of $273 million Third pa
Slide 39: Net profit reconciliation
Net profit reconciliation Half-year net profit after tax $million 300 30 271 262 1 (14) (24) 11 5 240 180 120 60 0 1H 2012 Prices and Volume Production Net finance Other Impairment 1H 2013 foreign costs costs exchange 39
Slide 40: Significant items after tax
Significant items after tax Half-year Half-year $million 2013 2012 Net profit after tax 271 262 Add/(deduct) significant items Net gains on asset sales (6) (6) Net impairment (reversal)/loss (8) 22 Other (6) 5 Underlying net profit 251 283 2013 net impairment reversal includes reversal of prior im
Slide 41: Application of AASB 11 Joint Arrangements
Application of AASB 11 Joint Arrangements AASB 11 Joint Arrangements became effective from 1 January 2013. Previously, Santos accounted for incorporated joint ventures using the proportionate consolidation method. Under AASB 11, several incorporated joint ventures are accounted for using the one lin
Slide 42: 2013 guidance
2013 guidance Item 2013 guidance Production (mmboe) 52-55 Production costs ($million)1 670-690 DD&A expense ($/boe) 16.50 Royalty related taxation expense2 50 ($million after tax) Capital expenditure (including $4 billion exploration & evaluation)3 1 Including the impact AASB 11 on production costs,
Slide 43: 2013 full-year sensitivities
2013 full-year sensitivities Sensitivity Change NPAT impact A$million US$ oil price +/-US$1/bbl +/-12 A$ gas price +/-10 cents/GJ +/-13 A$/US$ exchange rate +/-1 cent -/+12 43
Slide 44: 2013 exploration schedule
2013 exploration schedule Well name Basin / area Target Santos Interest Timing / result % Bassett West-1 Browse Gas 30 Gas discovery Bianchi-1 Carnarvon Gas 24.75 Gas discovery Winchester-1 Carnarvon Gas 75 Gas discovery Dufresne-1 Browse Gas 30 Drilling Cooper unconventional Cooper Gas 66.6 Q1 – Q4
Slide 45: Contact information
Contact information Head office Adelaide Andrew Nairn Ground Floor, Santos Centre Group Executive Investor Relations 60 Flinders Street Level 10, Santos Centre Adelaide, South Australia 5000 Direct: + 61 8 8116 5314 GPO Box 2455 Email: andrew.nairn@santos.com Adelaide, South Australia 5001 Telephone