Slide 1: ASX / Media Release
ASX / Media Release 18 February 2021 Santos reports record annual production and sales volumes, and strong free cash flow and underlying earnings despite impact of COVID-19 and lower commodity prices Full-year (US$m) 2020 2019 Change Product sales revenue 3,387 4,033 -16% EBITDAX1 1,898 2,457 -23% U
Slide 2: Media release continued: CEO comments
cost and capital allocation, and remaining cash flow positive through 2020 means we are well positioned for further efficiency gains and growth initiatives in 2021. “Consistent application of our low-cost disciplined operating model continues to deliver cost reductions and efficiencies, with unit pr
Slide 3: Santos 2020 Full-year results
Santos 2020 Full-year results 18 February 2021
Slide 4: Disclaimer and important notice
Disclaimer and 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 c
Slide 5: 2020 Highlights
2020 Highlights Our consistent and successful strategy combined with the disciplined, low-cost operating model continues to drive strong performance Record production and Strong free cash flow and low FID on high value infrastructure- sales volumes free cash flow breakeven led development + Producti
Slide 6: 2020 Full-year results
2020 Full-year results Strong operational and cost performance delivered $740 million of free cash flow and $287 million underlying profit. Reported loss includes previously announced impairments FREE CASH FLOW1 REPORTED LOSS AFTER TAX2 UNDERLYING PROFIT2 $740 $(357) $287 112% -35% -153% -60% millio
Slide 7: Record production volumes in 2020
Record production volumes in 2020 Diversified and balanced portfolio of conventional and unconventional assets delivered record production of 89.0 mmboe, 18% above 2019 2020 Production volume Production volume mmboe mmboe Queensland CAGR ~9% & NSW 89.0 13.4 75.5 Western Australia 31.1 61.6 59.5 58.9
Slide 8: Cash generative base business through the cycle
Cash generative base business through the cycle Diversified and balanced portfolio supportive of strong, sustainable free cash flow through the oil price cycle Free cash flow Oil price $million US$/bbl 2016 – 20 free cash flow >$3.7 billion 1,100 FCF breakeven oil price (unhedged) Average realised o
Slide 9: Safety and environment
Safety and environment Santos is committed to being the safest oil and gas operator in Australia and preventing harm to people and the environment Injury frequency rates Loss of containment incidents Rate per million hours worked Count of Tier 1 and Tier 2 1.0 35 30 0.8 25 0.6 20 0.4 15 10 0.2 5 0.0
Slide 10: Emission reductions targets and performance
Emission reductions targets and performance Ahead of plan to reach 2025 emissions target. Released fourth-annual Climate Change Report + Reduce emissions >5% across the 2020 performance 2025 target Cooper Basin and Queensland operations + Executed projects delivering + Ahead of plan Ahead of over 16
Slide 11: Roadmap to net zero
Roadmap to net zero CCS and hydrogen are the pathway to net zero emissions by 2040 2020 2040 Planned activities + Nature-based offsets include the existing savanna burning program in Arnhem Land ~5 mtCO2e + Energy Solutions to deliver 0.6 mtCO2e pa emission reduction projects by 2025 + Moomba CCS Ph
Slide 12: Finance and Capital Management
Finance and Capital Management Anthony Neilson Chief Financial Officer 10
Slide 13: Financial discipline
Financial discipline Strong base business and disciplined approach to capital allocation + Generated $740 million free cash flow in 2020 + Delivered 2020 free cash flow breakeven oil price of + ~US$24/bbl before hedging Strong, cash-generative base business with steady production + ~US$17/bbl after
Slide 14: 2020 Full-year financial snapshot
2020 Full-year financial snapshot Strong operational and cost performance delivered $740 million of free cash flow. Underlying profit lower due to lower realised commodity prices in 2020 $ million 2020 2019 Change Product sales revenue 3,387 4,033 (16%) EBITDAX 1,898 2,457 (23%) Underlying profit1 2
Slide 15: Strong free cash flow generation
Strong free cash flow generation At similar average oil prices to 2016, free cash flow in 2020 is over $0.5 billion stronger Operating cash flow Investing cash flow1 Free cash flow1 Oil price $ million $ million $ million US$/bbl Average realised oil price 2,046 (908) 1,200 1,138 80 1,100 (736) 1,00
Slide 16: Underlying earnings
Underlying earnings Underlying profit is 280% stronger than 2016 at similar average oil prices Product sales revenue EBITDAX Underlying profit1 $ million $ million $ million Average realised oil price 2,457 727 719 500 80 4,033 2,160 000 3,660 70 3,387 1,898 500 60 3,100 000 2,594 50 1,428 500 1,199
Slide 17: Record production and sales volumes
Record production and sales volumes Strong production growth with volumes increasing by >40% since 2016. 2021 guidance unchanged Production volume Sales volume mmboe mmboe 89.0 84-911 107.1 98-1051 94.5 75.5 84.1 83.4 78.3 61.6 59.5 58.9 2016 2017 2018 2019 2020 2021F 2016 2017 2018 2019 2020 2021F
Slide 18: Production costs
Production costs 10% reduction in upstream unit production costs (excluding ConocoPhillips acquisition) as cost reduction initiatives announced in Q1 2020 flowed through to the bottom line Upstream unit production costs1 $/boe 8.45 8.00-8.50 8.07 8.05 -10% 8.04 + Sustained cost improvement and opera
Slide 19: Our Operating Model in action
Our Operating Model in action Santos’ disciplined operating model continues to drive costs lower, with 2020 upstream unit production costs of US$8.04/boe at the lower end of the US$8.00-8.50/boe guidance range Total unit production cost1 Western Australia Northern Australia Disciplined $/boe product
Slide 20: Cash generative Operating Model continues to drive value
Cash generative Operating Model continues to drive value Diversified portfolio of core assets delivering strong margins despite lower prices 2020 Full year results summary1 Cooper Qld Nth Aust PNG WA Santos Basin & NSW & T-L2 Total revenue + Cost reductions are occurring across our operated 919 793
Slide 21: Capital expenditure
Capital expenditure At similar sustaining capex for the onshore business as 2016, delivered more than three times the number of wells and higher production 2020 capital expenditure $858 million1 Onshore capex / wells drilled Production + Comprising $748m sustaining and $110m major growth, $million /
Slide 22: Debt and liquidity
Debt and liquidity Net debt $3,664 million. Liquidity of over $3 billion Net debt Cash, debt and undrawn debt $million facilities at 31 December 20201 $million + Net debt $3,664 million (includes $457 million AASB 16 lease liabilities) as at 31 December 2020 4,749 Cash 1,319 + Gearing 33.6% (includi
Slide 23: Summary
Summary Disciplined low-cost operating model ensures we can sustain our base business and remain resilient through the cycle + Disciplined, low-cost operating model sets the framework to drive value + Delivered 2020 free cash flow breakeven oil price of ~US$24 per barrel (before hedging) and ~US$17
Slide 24: Growth Projects and Asset Performance
Growth Projects and Asset Performance Kevin Gallagher Managing Director and CEO 22
Slide 25: Disciplined growth
Disciplined growth Major growth projects all Santos-operated. Barossa on track for 1H 2021 FID Moomba Carbon Narrabri Gas Project Dorado Barossa Capture and Storage Phase 1 Phase 1 Milestones Long term LNG offtake FID-ready, subject to Commence appraisal drilling FEED-entry planned for agreement exe
Slide 26: Barossa and Darwin LNG life extension
Barossa and Darwin LNG life extension On track for FID in 1H 2021. Targeting cash cost of production of ~$2.00/mmBtu Barossa development FID-ready + Long term LNG offtake agreement signed with DGI, a wholly- owned subsidiary of Mitsubishi + Capex estimated at ~$3.6 billion gross FID to first gas, as
Slide 27: Offshore conventional business
Offshore conventional business Santos supplies ~45% of Western Australia’s domestic gas requirements + WA EBITDAX margin maintained at 74% Strong cash highlighting benefit of fixed price domestic margin, low- gas contracts cost operating business + WA unit production cost $6.34 per boe, down 38% sin
Slide 28: Growing production and improving efficiency
Growing production and improving efficiency Quadrant and ConocoPhillips acquisitions have transformed the scale of the Offshore business Strong gas production Western Australia production1 Lowered production costs Western Australia upstream mmboe production cost + Western Australia’s largest + Unit
Slide 29: Backfill opportunities for Varanus Island and Devil Creek
Backfill opportunities for Varanus Island and Devil Creek High-return, near-field development opportunities close to existing infrastructure Spartan Kultarr Spar Deep Corvus Yoorn Dancer Resource FID taken in Contingent Contingent Contingent Prospect Prospect Type Feb 2021, Resource Resource Resourc
Slide 30: Integrated onshore business with market optionality
Integrated onshore business with market optionality Onshore assets connected to domestic markets and long-term Asian demand for LNG with strong growth options + Growth self-funded within the low cost Australia’s lowest cost disciplined Operating Model onshore operator + Driving capital efficiency to
Slide 31: Cooper Basin
Cooper Basin Operating model is delivering higher production, cost discipline and self-funded growth Strong gas production Cooper Basin production Targeting >100% 2P RRR Reserves replacement ratio (RRR) mmboe % three year rolling average + Expect to maintain annual + Strong SW Qld NFE results 16.8 p
Slide 32: Strong GLNG upstream production and cost out
Strong GLNG upstream production and cost out Record upstream GLNG production driven by strong ramp at Roma and Arcadia supporting ~6.2 mtpa LNG run-rate from 2021. Maintaining cost discipline and improving performance Strong gas production GLNG sales gas production Driving down operating cost Mean t
Slide 33: Creating midstream infrastructure value and optionality
Creating midstream infrastructure value and optionality Established Midstream Infrastructure business to realise cost-out and operating efficiency benefits. Business generates stable and material EBITDA of ~$400 million per annum1 Phase 1: 2019 - 2020 Phase 2: 2021+ Operate processing facilities as
Slide 34: McArthur-Beetaloo and South Nicholson opportunities
McArthur-Beetaloo and South Nicholson opportunities Multi-Tcf shale gas potential in two basins with proven flow at Tanumbirini-1 Strategic Opportunities 2021 2 x horizontal wells with + Options to satisfy north and east coast gas markets fracture stimulation and test McArthur-Beetaloo Project + Str
Slide 35: Papua New Guinea
Papua New Guinea PNG LNG is a world-class, low-cost asset consistently delivering above nameplate production with future backfill options + PNG EBITDAX margin maintained at 78% Strong cash in 2020 margin, low- + Production cost $4.21/boe cost operating asset + Increased cash flow ~2026 once project
Slide 36: Summary
Summary 1 Strong financial results in 2020 2 Disciplined, low-cost operating model is delivering consistent results 3 Cash generative base business 4 Disciplined and phased growth: targeting Barossa and Moomba CCS FID in 2021 5 Strong balance sheet supportive of phased growth 2020 Full-year results
Slide 37: Appendix
Appendix Santos
Slide 38: Financial performance
Financial performance EBITDAX down 23% to $1,898 million. Underlying profit down 60% to $287 million $million 2020 2019 Variance Total revenue 3,512 4,186 (16%) + Total revenue down 16% due to lower realised prices Production costs (716) (546) 31% + Average realised oil price down 34% to $47.70/bbl
Slide 39: Sales revenue
Sales revenue Fixed-price domestic gas contracts shield sales revenues from impact of lower oil prices Average realised crude oil price Average realised LNG price $million 2020 2019 Variance US$/bbl US$/mmBtu Sales Revenue (incl. third party) -34% -35% 71.99 9.77 Gas, ethane and liquefied gas 2,505
Slide 40: Free cash flow
Free cash flow Calculation of 2020 full-year free cash flow $million 2020 Operating cash flows 1,476 Deduct Investing cash flows (1,461) Add Net acquisitions and disposals 734 Add Major growth capex 110 Deduct Lease liability payments (119) Free cash flow 740 Lease liability payments are now treated
Slide 41: Significant items
Significant items Reconciliation of full-year net (loss)/profit to underlying profit $million 2020 2019 Net (loss)/profit after tax (357) 674 Add/(deduct) significant items after tax Impairment losses 653 46 Net gains on asset sales - (8) Fair value (gains)/losses on hedges (30) 7 One-off acquisitio
Slide 42: Drawn debt maturity profile
Drawn debt maturity profile No significant near-term debt maturities until 2024 Drawn debt maturity profile1 Breakdown of drawn Drawn debt maturity profile excluding PNG debt facilities1 LNG project finance1 $million % $million 1,500 1,500 $750 million acquisition $750 million acquisition facility r
Slide 43: Liquidity and net debt as at December 2020
Liquidity and net debt as at 31 December 2020 Net debt $3,664 million. Liquidity of over $3.1 billion Liquidity ($million) 31 Dec 2020 31 Dec 2019 Cash 1,319 1,067 Undrawn bilateral bank debt facilities 1,870 1,870 Total liquidity 3,189 2,937 Debt ($million) Export credit agency supported loan facil
Slide 44: 2021 guidance
2021 guidance 2021 guidance maintained 2021 guidance item Guidance1 Production (mmboe) 84-91 mmboe Sales volumes (mmboe) 98-105 mmboe Capital expenditure – base ($m) ~900 million Capital expenditure – major growth ($m) ~700 million Upstream production costs ($/boe) 8.00-8.50/boe 1 All 2021 guidance
Slide 45: 2020 Full-year segment results summary
2020 Full-year segment results summary Northern Corporate Queensland Western US$million Cooper Basin PNG Australia & explor’n & Total & NSW Australia Timor-Leste elimins Revenue 919 793 451 466 742 141 3,512 Production costs (131) (76) (56) (284) (198) 29 (716) Other operating costs (60) (78) (41) -
Slide 46: 2019 Full-year segment results summary
2019 Full-year segment results summary Northern Corporate Queensland Western US$million Cooper Basin PNG Australia & explor’n & Total & NSW Australia Timor-Leste elimins Revenue 1,164 1,055 663 165 955 184 4,186 Production costs (123) (71) (80) (67) (225) 20 (546) Other operating costs (74) (87) (51
Slide 47: Oil price hedging
Oil price hedging Oil price hedging provides protection to oil price downside Open oil price positions 2021 2022 Zero cost collars (barrels) 15,000,000 2,000,000 Average floor price ($/bbl) 42 50 Average ceiling price ($/bbl) 55 61 2020 Full-year results 45