Santos Limited · ASX:STO
Santos — Investor Day (November 2023)
83 slides from Santos's investor day presentation, Nov 22, 2023
Slide 1: ASX / Media Release
ASX / Media Release 22 November 2023 2023 Investor Day Santos today reaffirmed its strategy to deliver long-term shareholder value, provide reliable, affordable energy for customers and achieve net-zero emissions (scope 1 and 2, equity share) by 2040. Speaking at the company’s Investor Day in Sydney
Slide 2: Media release continued: project progress and guidance
Indigenous communities. Alaska is a low-risk jurisdiction with world class environmental standards and values its resources sector. “Barossa is 64 per cent complete. Despite the challenging approvals, regulatory and third-party litigation environment in Australia, we continue to progress work on our
Slide 3: Investor Day 2023
Investor Day 2023 22 NOVEMBER 2023
Slide 4: Disclaimer and important notice
2023 Investor Day Disclaimer and important notice This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry, and the carbon capture and storage and carbon emissions reduction technologies industries. It is believed that the expect
Slide 5: Agenda
2023 Investor Day Agenda Session One Session Two 09:00 am Delivering long term shareholder value 10:40 am Alaska Kevin Gallagher Managing Director and Chief Executive Officer Mark Ireland Senior VP Subsurface Alaska 09:40 am Markets update 10:50 am Santos Energy Solutions Anthony Neilson Chief Comme
Slide 6: Acknowledgement of Country
2023 Investor Day Santos acknowledges that we are meeting on the traditional land of the Gadigal people of the Eora Nation and pays respect to Elders past, present and emerging. We would also like to extend that respect to all First Nations people here today, and to all the First Nations people acro
Slide 7: Delivering long term shareholder value
2023 Investor Day Delivering long term shareholder value Kevin Gallagher Managing Director and Chief Executive Officer 4
Slide 8: Santos’ strategy
2023 Investor Day Santos’ strategy Our purpose is to provide reliable and affordable energy to help create a better world for everyone > Explore new fuel opportunities Low > Market led developments, carbon fuels leveraging existing customers > Disciplined approach to growth > Develop our three decar
Slide 9: Capital Management Framework
2023 Investor Day Capital Management Framework Right balance of disciplined and phased major project spend, returns to shareholders and investment in the energy transition Disciplined operating model Cash from operations Sustaining capital 1 Free cash flow from operations 2 Maintain strong balance s
Slide 10: Backfill and sustain
2023 Investor Day Backfill and sustain Strong base business and stable production Backfilling and sustaining our production... …with world class projects Production by phase1 Barossa Pikka phase 1 Papua LNG mmboe, Santos share 120 First gas First oil In FEED, targeted targeted targeting FID 90 1H 20
Slide 11: Decarbonisation
2023 Investor Day Decarbonisation Our three depleted reservoir CCS hubs offer low-cost solutions for Santos and third party emissions Imports CO2 Transmission Line Injection Wells Inject Capture Compress Dehydrate Compress Liquefaction Export Import Facility Third-party CO2 service Depleted Gas Rese
Slide 12: Low carbon fuels
2023 Investor Day Low carbon fuels Demand from existing and new customers is forecast to increase materially by 2030 and beyond E-methane pre-FEED studies underway with Renewables to Green Hydrogen Osaka Gas & Tokyo Gas to supply into Japanese market Japan targeting 1% DAC Local Emissions Methanatio
Slide 13: Business overview
2023 Investor Day Business overview Upside exposure to LNG, domestic gas, liquids, carbon management and low carbon fuels markets Upstream Gas and Liquids Santos Energy Solutions Four world-class Three Five midstream assets in Australia and Timor-Leste LNG projects natural gas and liquids businesses
Slide 14: LNG portfolio
2023 Investor Day LNG portfolio High quality, low emissions intensity LNG portfolio to meet growing Asian demand High quality portfolio of assets Proximal to Asian demand centres 3 > Four world class LNG assets sustaining Santos capacity of ~7.7 Mtpa 1 and increasing production > Infrastructure foot
Slide 15: Upstream Gas and Liquids
2023 Investor Day Upstream Gas and Liquids Diversified portfolio with strong cash flows and backfill opportunities to sustain production East coast West coast Cooper Basin Queensland & NSW Western Australia Northern Aust & Timor-Leste > 2C: 266 mmboe > 2C: 513 mmboe > 2C: 437 mmboe > 2C: 766 mmboe >
Slide 16: Alaska
2023 Investor Day Alaska Right project at the right time in the right location > Pikka Phase 1: 29% complete 1 > World-class resource space > Significant free cash flow > Leveraging significant infrastructure > Highly experienced operational team > Stable regulatory environment > Community projects
Slide 17: Australian regulatory environment update
2023 Investor Day Australian regulatory environment update Environmental approvals uncertainty impacting all offshore activity > Industry needs a regulatory regime that provides reasonable upfront certainty on the rules required to obtain approvals > Industry must be able to rely on approvals given
Slide 18: Santos Energy Solutions
2023 Investor Day Santos Energy Solutions Clear strategy to complement core Upstream Gas and Liquids business by building a profitable and targeted portfolio focused on decarbonising our base business, providing carbon management services and low carbon fuels Established Target net-zero Commercial o
Slide 19: Energy Solutions – Midstream infrastructure
2023 Investor Day Energy Solutions – Midstream infrastructure Running strong portfolio of strategic assets for value Eastern Australia Hub Northern Hub Western Australia Hub Moomba Port Bonython Darwin LNG Varanus Island Devil Creek Gas: 400 TJ/d Liquids: LNG: 3.7 Mtpa, Gas: Gas: Nameplate throughpu
Slide 20: Carbon solutions
2023 Investor Day Carbon solutions Creating a portfolio of high-quality units to allow Santos achieve its compliance requirements in Australia and Alaska, plus stated objectives. Activities will also facilitate access to third-party markets over time Carbon markets tailwinds Established developer of
Slide 21: Personal and process safety performance
2023 Investor Day Personal and process safety performance ‘Always safe’ is a core value at Santos, our focus is now on contractor management improvements Lost time injury rate X Process safety 2 Cultural heritage management 3 Number per million hours worked Number per million hours worked Number of
Slide 22: Disciplined and consistent execution of strategy
2023 Investor Day Disciplined and consistent execution of strategy Strategy continues to deliver strong results Gearing 1,2 Upstream unit production cost 4 Free cash flow from operations 5 % $/boe $ million 3,641 40 11 Gearing target range 15-25% 10 30 9 20 ~1,600 1,504 8 1,138 1,006 10 740 7 618 20
Slide 23: Free cash flow from operations
2023 Investor Day Free cash flow from operations Continuing cash flow generation targeting significant returns to shareholders Targeting ROACE of ~15-20% by 2028 3 Free cash flow from operations 1 Free cash flow per share 2 1.1 ~$5.1b $ billion US$ per share 0.7 ~$3.5b 0.5 0.5 0.4 Papua 0.3 Barossa,
Slide 24: Performance highlights
2023 Investor Day Performance highlights Strong performance and positive outlook Recent business performance highlights Total free cash flow 1 Total shareholder returns 2 Reduction in net debt 3 Moomba CCS since January 2022 since January 2022 since January 2022 construction $5.2 billion $2.0billion
Slide 25: Santos’ investment proposition
2023 Investor Day Santos’ investment proposition A diversified and cash generative portfolio driving shareholder returns and well positioned for the energy transition A high-quality portfolio Strong cash generation Decarbonising Developing new of diversified assets supports higher returns our busine
Slide 26: 2024 strategic priorities
2023 Investor Day 2024 strategic priorities Multiple near-term catalysts to unlock value for shareholders 1 Deliver safe and reliable production within our base business 2 Progress major projects in execution – Barossa, Pikka and Papua LNG to FID 3 Backfill and sustain production across our East Coa
Slide 27: Markets update
2023 Investor Day Markets update Anthony Neilson Chief Commercial Officer 24
Slide 28: Oil and gas required beyond 2050
2023 Investor Day Oil and gas required beyond 2050 Oil and gas will have a place in the Asia Pacific energy mix for decades to come IEA 1.7-degree Announced Pledges Scenario: IPCC 1.5-degree Scenarios: Asian gas demand 2 selected Asian Asia Pacific total primary energy demand 1 countries including
Slide 29: Strong long-term LNG demand
2023 Investor Day Strong long-term LNG demand Santos is geographically advantaged to supply LNG to meet growing Asia Pacific demand LNG supply and demand million tonnes per annum > LNG demand is strong and growing to 2040 800 > Limited new supply is expected to reach the market until 2026 600 400 20
Slide 30: Domestic gas supply critical to energy reliability
2023 Investor Day Domestic gas supply critical to energy reliability New supply required to meet demand and ensure affordable gas prices, supportive conditions for pricing West coast domestic gas market1 East coast domestic gas market (southern regions) 2 TJ/d PJ/annum 2,000 450 1,050 300 1,000 150
Slide 31: Oil demand growing this decade
2023 Investor Day Oil demand growing this decade Santos oil assets are positioned to meet growing global demand Brent pricing1 Global liquids supply and demand 2 US$ per barrel million barrels per day 150 120 80 100 40 50 0 2020 2030 2040 2050 Other liquids (estimated) Base crude New supply Demand (
Slide 32: Australian carbon market
2023 Investor Day Australian carbon market Forecast demand growth for emissions reduction units in the Australian market driven by Safeguard Mechanism facilities, with the market expected to be short later this decade ACCU annual demand vs. ACCUs annual issuance (central case) ACCUs million > Foreca
Slide 33: Market fundamentals support our strategy
2023 Investor Day Market fundamentals support our strategy Our products are essential to support energy security, and economic development. Santos has a low cost and lower carbon LNG portfolio with competitive advantage of being close to our Asian market customers > Barossa, PNG LNG backfill plus Pa
Slide 34: Eastern Australia & PNG
2023 Investor Day Eastern Australia & PNG Brett Darley EVP Eastern Australia & PNG 31
Slide 35: Eastern Australia and PNG
2023 Investor Day Eastern Australia and PNG Diversified portfolio with a combination of strong cash flows and backfill opportunities to sustain production PNG East Coast Australia PNG LNG Papua LNG GLNG Cooper Basin Narrabri Status > Producing > Unsanctioned > Producing > Producing > Unsanctioned (T
Slide 36: Moomba CCS project update
2023 Investor Day Moomba CCS project update Moomba CCS on track to deliver Santos’ first major decarbonisation project with up to 1.7 Mtpa CO2 injection Moomba CCS ~75% complete 1, first injection expected in 1H 2024 Expected cost to complete ~$220 million, targeting life cycle cost of ~$US24 per to
Slide 37: Papua LNG project overview
2023 Investor Day Papua LNG project overview Continue growth in supply of low intensity LNG to meet South East Asian demand Project overview Elk and Antelope PRL 15 Capacity Up to 6 Mtpa onshore fields CPF Development 9 production wells, 1 water injection well, 1 CO2 reinjection well, Baimuru 1 gas
Slide 38: PNG LNG: low-cost LNG to Asia Pacific
2023 Investor Day PNG LNG: low-cost LNG to Asia Pacific Capitalising on an enormous resource base and infrastructure position to provide reliable production to Asian markets Large resource base Strong and reliable plateau production Reliable infrastructure Reserves and contingent resources PNG produ
Slide 39: GLNG: record field performance
2023 Investor Day GLNG: record field performance Proven strong performance with record high production, and with significant remaining resources to develop Record field performance GLNG upstream production 1 mmboe per annum, Santos share 15 Forecast 2 2P Reserves > 300 mmboe Santos share, across all
Slide 40: GLNG: CSG horizontal wells enhancing well productivity
2023 Investor Day GLNG: CSG Horizontal wells enhancing well productivity Improvements in drilling capability, excellent production performance in well trials, record wells online in 2023 Improved drilling performance Unlocking production Record annual well program Horizontal drilling performance Hor
Slide 41: Cooper Basin: New life into mature fields
2023 Investor Day Cooper Basin: New life into mature fields Extending basin life from mature fields with low cost, high value, short cycle investment Extending Cooper life Granite Wash: Extending basin life Oil delivering high value > ~40% of total conventional gas production > Proven unconventional
Slide 42: Cooper Basin: Patchawarra unlocking potential
2023 Investor Day Cooper Basin: Patchawarra unlocking potential Patchawarra should see higher longer-term, lower risk production Campaigns deliver cost-out Patchawarra development in Moomba area has Moomba drilling unit cost added 80 mmscf/d production in last 12 months US$ million per well 1.9 1.7
Slide 43: EA and PNG decarbonisation
2023 Investor Day EA and PNG decarbonisation 2025 emissions reduction target met, with net-zero emissions 2040 pathway from improving operational efficiencies and carbon capture 2040 net-zero emissions pathway Cooper > Moomba CCS > Field and facility electrification and optimisation QLD & NSW > Fiel
Slide 44: Eastern Australia and PNG
2023 Investor Day Eastern Australia and PNG Low-cost development focus supporting low emission intensity production to domestic and Asian markets PNG LNG: Tier 1 LNG asset with material backfill opportunities to sustain production Papua LNG: High margin expansion project leveraging existing infrastr
Slide 45: Western & Northern Australia & Timor-Leste
2023 Investor Day Western & Northern Australia & Timor-Leste Vincent Santostefano EVP WA, NA & TL 42
Slide 46: Western, Northern Australia & Timor-Leste
2023 Investor Day Western, Northern Australia & Timor-Leste Diversified portfolio with a combination of strong cash flows and backfill opportunities to sustain production Western Australia Barossa to DLNG Dorado Status > Producing > Barossa: Targeting first production 1H25 > Unsanctioned > Target FI
Slide 47: Western & Northern Australia production
2023 Investor Day Western & Northern Australia production Diversified portfolio with a combination of strong cash flows and backfill opportunities to sustain production > Significant growth in the Offshore Business with Barossa > Exploration is targeted in the Bedout contingent Bedout Basin to furth
Slide 48: Western Australia
2023 Investor Day Western Australia WA utilising existing infrastructure to backfill and sustain Halyard infill project 1 Focus on capital discipline > Reusing existing infrastructure Phased and responsible > Low incremental opex and low breakeven price > ~8 mmboe of additional production from capex
Slide 49: Barossa project update
2023 Investor Day Barossa project update Santos is fully committed to deliver the world-class Barossa Gas Project Barossa snapshot Progress > 64% complete Current > FPSO hull departed Korea and arrived in Singapore on Status 15 November 2023 to commence integration > FPSO topside modules fabrication
Slide 50: Western, Northern Australia & Timor-Leste
2023 Investor Day Western, Northern Australia & Timor-Leste Optimising existing assets in an increasingly under supplied domestic market and delivering the Barossa project Leading dedicated domestic gas position: Attractive exposure to increasingly undersupplied markets Innovation: Using technology
Slide 51: Alaska
2023 Investor Day Alaska Mark Ireland Senior Vice President Subsurface and Exploration 48
Slide 52: Pikka Phase 1 project overview
2023 Investor Day Pikka Phase 1 project overview The right project at the right time in the right location Portfolio overview Project status Optimised using existing pipeline capacity, single small > Contract commitments totaling over US$2 billion to date Development plan footprint drilling pad and
Slide 53: Drilling improvement
2023 Investor Day Drilling improvement Early learnings capture driving performance Drilling depth Feet/days 0 5,000 Improving Performance 10,000 15,000 > Adjusted drilling mud properties to improve hole stability > Adjusted drilling practices to further improve hole stability > Trajectory changes im
Slide 54: Significant, long-term supply portfolio
2023 Investor Day Significant, long-term supply portfolio Self-funding development pipeline plus providing significant returns > Cash flow from Phase 1 will be very robust Net resource by unit 1 > Self fund whilst providing returns to shareholders STO Units Nanushuk Fairways STO Discovery Terminal N
Slide 55: Beyond Phase 1
2023 Investor Day Beyond Phase 1 Lower capital requirements and breakeven, higher returns for subsequent phases Scalable facility concept Development schematic Expansions leverage Phase 1 infrastructure > Roads and pipelines > Seawater treatment plant Phase 1 > Pad Space for facility expansion Proce
Slide 56: Alaska
2023 Investor Day Alaska World-class resource in tier 1 jurisdiction, with significant optionality World-class resource base of scale with 2P reserves of 165 mmboe and 2C of 438 mmboe 1 Significant free cash flow: modular design can self-fund future development phases and fund returns to shareholder
Slide 57: Santos Energy Solutions
2023 Investor Day Santos Energy Solutions Alan Stuart-Grant Executive Vice President Santos Energy Solutions 54
Slide 58: Global progress towards Net Zero
2023 Investor Day Global progress towards Net Zero Government policy and emissions reduction targets are creating attractive commercial opportunities for Santos Global themes Santos’ key customer markets Domestic 2030 Emission 50-52% vs. 2005 55% vs. 1990 46% vs. 2013 40% vs. 2018 43% vs. 2005 Reduc
Slide 59: Santos Energy Solutions Strategy
2023 Investor Day Santos Energy Solutions Strategy Clear strategy to complement core Upstream Gas and Liquids business in decarbonising our assets whilst profitably providing carbon management services Established cash flow Commercial opportunity to build new earnings streams providing Target net-ze
Slide 60: Three operated CCS and low carbon fuels hubs
2023 Investor Day Three operated CCS and low carbon fuels hubs Repurposing existing infrastructure and depleted reservoirs to deliver new earnings streams Eastern Australia Hub Northern Hub Western Australia Hub Moomba Darwin and Bayu-Undan Reindeer FEED nearing completion Targeting FEED entry 2024
Slide 61: CCS market growth
2023 Investor Day CCS market growth Significant opportunity to build a profitable carbon sequestration business; customer interest and policy support strong Hugh demand growth opportunity in Asia Global CCS adoption continues to grow CCS Injection Rates Pipeline of commercial CCS facilities since 20
Slide 62: CCS volumes: Santos first then third party
2023 Investor Day CCS volumes: Santos first then third party Santos hubs offer low-cost solutions for Santos and third party emissions Imports CO2 Transmission Line Injection Wells Inject Capture Compress Dehydrate Compress Liquefaction Export Import Facility Third-party CO2 service Depleted Gas Res
Slide 63: Compelling CCS value opportunity
2023 Investor Day Compelling CCS value opportunity Leveraging core capabilities to capture attractive margins Moomba is one of the lowest cost CCS projects globally Focus on transportation and multiple hubs Carbon capture cost Carbon capture volume US$ / tonne Mtpa 120 High Moomba CCS IRR >20% 30 10
Slide 64: Low carbon fuels provides longevity to Santos
2023 Investor Day Low carbon fuels provides longevity to Santos Santos will use its advantaged infrastructure and operations to develop a portfolio of decarbonisation technologies Technology and collaborations CO2 gathering Direct Air Capture Green power CCS Aggregators, shippers, APA CSIRO agreemen
Slide 65: Attractive commercial opportunity
2023 Investor Day Attractive commercial opportunity Multiple levers to use our assets, relationships and capabilities to grow earnings Material future earnings growth potential Actionable, attractive commercial opportunities EBITDA potential for Santos Energy Solutions Midstream infrastructure > Inc
Slide 66: Santos Energy Solutions
2023 Investor Day Santos Energy Solutions Supportive Net Zero backdrop: policy environment and thematic tailwinds Strategic infrastructure: strong free cash flow generation to fund transition Asset repurposing strategy: deploys existing capabilities and relationships Near-term new earnings: CCS firs
Slide 67: Finance and capital management
2023 Investor Day Finance and capital management Anthea McKinnell Chief Financial Officer 64
Slide 68: Finance and capital management
2023 Investor Day Finance and capital management Continued capital management to provide shareholder returns and fund growth Disciplined capital allocation Disciplined cost management and efficiency gains Strong free cash flow from operations 1, transitioning to a lower capital intensity phase Well
Slide 69: Unit production costs compared to peers
2023 Investor Day Unit production costs compared to peers Santos maintains financial discipline through high inflationary periods Unit production cost v peers 1 Santos unit production costs per year US$/boe US$/boe 12 8.45 Peer Median 1 8.07 8.05 8.04 7.76 7.82 2 7.62 2 11 7.24 10 9 8 Santos 7 2016
Slide 70: Strong free cash flow generation
2023 Investor Day Strong free cash flow generation Free cash flow is increasing, and capital commitments are rapidly reducing Free cash flow from operations 1,2 and major projects capital expenditure 3 US$ billion 4.0 Incremental average FCF at $90/bbl Brent & $14/mmBtu JKM over 2026 to 2028 3.0 Inc
Slide 71: Growing shareholder returns
2023 Investor Day Growing shareholder returns Strong cash flows from projects online set to deliver significant returns to shareholders Target cash sources and uses 2024-2028 1,2 $ billion 20 15 FCF at ~$90/bbl Brent & Incremental ~$14/mmBtu JKM surplus cash Surplus cash for returns to shareholders
Slide 72: Balance Sheet positioned to deliver strategy
2023 Investor Day Balance Sheet positioned to deliver strategy Strong support received for recent debt issuance demonstrates strength of the business Targeting 15-25% gearing 1 through the cycle 2024 Commodity Price Exposure Drawn debt maturity profile 2 Sales volumes US$ million % of boe 1,000 Fixe
Slide 73: Production and Capex guidance
2023 Investor Day Production and Capex guidance 2024 production guidance Production guidance 1 Sustaining capex Major project capex 1, 2, 3 mmboe Included in FCF from operations, $ million Excluded from FCF operations, $ million 100 1,200 ~1,250 1,600 ~1,500 -1,600 ~1,600 ~89-93 mmboe ~1,100F ~84-90
Slide 74: Final remarks and Q&A
2023 Investor Day Final remarks and Q&A Kevin Gallagher Managing Director and Chief Executive Officer 71
Slide 75: Free cash flow from operations
2023 Investor Day Free cash flow from operations Continuing cash flow generation targeting significant returns to shareholders Targeting ROACE of ~15-20% by 2028 3 Free cash flow from operations 1 Free cash flow per share 2 1.1 ~$5.1b $ billion US$ per share 0.7 ~$3.5b 0.5 0.5 0.4 Papua 0.3 Barossa,
Slide 76: Santos’ investment proposition
2023 Investor Day Santos’ investment proposition A diversified and cash generative portfolio driving shareholder returns and well positioned for the energy transition A high-quality portfolio Strong cash generation Decarbonising Developing new of diversified assets supports higher returns our busine
Slide 77: 2024 strategic priorities
2023 Investor Day 2024 strategic priorities Multiple near-term catalysts to unlock value for shareholders 1 Deliver safe and reliable production within our base business 2 Progress major projects in execution – Barossa, Pikka and Papua LNG to FID 3 Backfill and sustain production across our East Coa
Slide 78: Appendix
2023 Investor Day Appendix 75
Slide 79: Definitions and Abbreviations
2023 Investor Day Definitions and Abbreviations Absolute When used in reference to emissions reduction targets means reduction against the total emissions at the relevant Net Zero In relation to greenhouse gas emissions, is achieved when anthropogenic emissions of greenhouse gases are point in time,
Slide 80: Our decarbonisation plan
2023 Investor Day Our decarbonisation plan Santos is committed to achieving Scope 1 and 2 net zero emissions by 2040 via our Climate Transition Action Plan Our decarbonisation targets Our Climate Transition Action Plan 2025 Actual 2030 Targets 2040 Targets Operational Efficiencies Broad range of ini
Slide 81: Respectful partnerships
2023 Investor Day Respectful partnerships Proactively building enduring relationships delivering mutually beneficial outcomes Partnerships that deliver > Engaged ~400 Cultural Heritage Officers 1 mutually beneficial outcomes > Completed ~1,800 Cultural Heritage Assessments 2 Respectful relationships
Slide 82: Global Reserves and Resources
2023 Investor Day Global Reserves and Resources 1 Significant reserves and resources position, providing optionality and diversification 2P Reserves 1P Reserves 2C Contingent Resource Santos Non-Operated Acreage Santos Operated Acreage 0 400km 800km Santos share mmboe 1P Reserves 1,028 2P Reserves 1
Slide 83: 2023 Investor Day
2023 Investor Day 80