Santos Limited · ASX:STO
Santos — 2014 CLSA Investors' Forum
31 slides from Santos's conference presentation, Sep 15, 2014
Slide 1: 2014 CLSA Investors' Forum
2014 CLSA Investors’ Forum Hong Kong, September 2014
Slide 2: 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 3: Santos overview
Santos overview A leading energy company in Australia and Asia Australia’s leading domestic gas producer Bay of Bengal 2013 production 140,000 boe/d (70% gas/30% liquids) Phu Khanh Nam Con Son Offshore Malaysia Top-25 Australian Securities Exchange listed company West Natuna Market capitalisation Pa
Slide 4: Strong business outlook
Strong business outlook LNG projects are providing the foundation for further growth and increased shareholder returns Clear production growth outlook Growing margins Robust funding position provides the capacity to fund execution of strategy Hides Gas Conditioning Plant, PNG LNG 4 | 2014 CLSA INVES
Slide 5: First-half summary
First-half summary PNG LNG start-up ahead of schedule and strong progress on GLNG enables significant lift in interim dividend Safety LTIFR of 0.6 per million hours worked • PNG LNG start-up ahead of schedule with first cash received in July Strong project • GLNG more than 85% complete and on delive
Slide 6: Production
Production PNG LNG start-up drives sound first half and builds momentum for a stronger second half Average daily production First half production up 2% ─ PNG LNG first LNG in April 2014 boe/day 170,000 ─ Peluang first gas in March 2014 160,000 164,000 Full-year guidance maintained at 52-57 mmboe 150
Slide 7: Dividends
Dividends Start-up and first cash from PNG LNG has enabled the 33% increase in interim dividend to 20 cents per share fully-franked Fully-franked dividends declared per share Cents per Increased dividend consistent share with prudent capital 50 management PNG LNG FID Plan to maintain or increase 40
Slide 8: 2014 Highlights
2014 Highlights Three projects delivered, GLNG progressing well and exploration success in the Browse Vietnam oil Malaysia Dua project delivered on Farm-in to Block S, first schedule in July 2014 exploration well in Q4 2014 Indonesia gas PNG LNG Peluang project delivered Delivered ahead of schedule
Slide 9: Strong Asian demand for LNG
Strong Asian demand for Large opportunity exists for new projects to supply LNG into the Asian market Asian LNG supply and demand mtpa Asia leads global LNG demand with LNG forecast to meet over 50% of 450 Asia’s gas needs 400 − Asian LNG demand grows at CAGR of 5.5% 350 − By 2030, over 71% of globa
Slide 10: Santos' LNG portfolio
Santos’ LNG portfolio Strong project delivery and performance supportive of backfill and expansion opportunities Darwin 11.5% equity, 3.7 mtpa plant capacity LNG First LNG in 2006, >400 cargoes delivered Fully contracted to 2022 Multiple options for backfill and expansion Producing emerging PNG LNG
Slide 11: PNG LNG project
PNG LNG project Successful delivery of the project in April 2014. Over 20 cargoes have been shipped since start-up PNG LNG plant 11 | 2014 CLSA INVESTORS' FORUM
Slide 12: PNG Drilling
PNG Drilling Drilling complete on the Hides G-pad wells and PWD well. Hides Deep expected to be spudded in Q4 2014 PNG LNG Drilling ─ All eight Hides development wells successfully drilled to TD ─ Six of these are on production with the two G-pad wells currently being completed ─ Hides PWD well has
Slide 13: GLNG project summary
GLNG project summary The GLNG project is more than 85% complete and on track for first LNG in 2015 Project Santos (30% and operator), partners PETRONAS, Total and KOGAS LNG plant 7.8 mtpa of LNG; 7.2 mtpa has been capacity sold to PETRONAS and KOGAS Gross US$18.5 billion1 from FID to the end of capi
Slide 14: GLNG upstream
GLNG upstream Construction of two upstream gas hubs is complete and commissioning is underway 77 wells were spudded in 1H 2014 Performance of Fairview wells continues to exceed expectations – average optimum gas capacity of 2.2 TJ/day per well Roma wells on line and dewatering, supporting individual
Slide 15: GLNG downstream
GLNG downstream Pipeline commissioning commenced, with LNG plant commissioning on track for Q4 2014 Milestone Date Marine crossing tunnelling February 2014 completed Last Train 1 module set June 2014 First LNG tank hydrotest July 2014 Pipeline commissioning August 2014 commenced Last Train 2 module
Slide 16: Capital expenditure and opex guidance
Capital expenditure and US$18.5 billion1 capex from FID to the end of 2015 opex guidance 2016-20 average capex estimate A$1 billion pa Vast majority of 2016-20 expenditure is the upstream, and Capital expenditure estimate includes: FID to end of ─ Drilling and completion of new wells (~200–300 per a
Slide 17: Third party gas supply
Third party gas supply Third party gas generates significant value for the project Attractive oil-linked Supplier Quantity TJ/day Starts Term Delivery point Price basis gross margins Santos portfolio 750 PJ 140 2015 15 years Wallumbilla Oil-linked ‘Horizon’ Provides operational Origin 365 PJ 100 201
Slide 18: Bayu-Undan / Darwin LNG
Bayu-Undan / Darwin LNG Strong production in 2014. Progress on Phase 3 offshore expansion. Multiple feed gas options for backfill and expansion emerging Maintain high margin asset Site for new ─ track record of reliable delivery LNG trains (400+ cargoes since 2006; above contract production) Site fo
Slide 19: Northern Australia
Northern Australia Exciting opportunity to target high quality LNG opportunities through partnerships and collaboration Barossa-Caldita Three well appraisal drilling campaign underway Bayu-Undan Phase 3 offshore expansion program underway Petrel-Tern Assessment of concept Crown gas alternatives unde
Slide 20: Lasseter-1 well
Browse Basin Significant gas-condensate discovery with the Lasseter-1 well, adding to Santos’ material resource position in the Browse Lasseter gas-condensate discovery ─ Well intersected a gross gas-condensate section of 405 metres ─ Wireline logging has confirmed 78 metres of net gas pay in the Ju
Slide 21: Eastern Australia gas market transformation
Eastern Australia gas Additional supply is required to meet increased market transformation demand and Santos well placed to benefit Eastern Australia gas demand (PJ) Tripling of gas demand creating market tightness 2,500 Recent east coast gas contracts >$8/GJ 2,000 APLNG 1,500 GLNG New sources of g
Slide 22: Cooper Basin unconventional exploration program
Cooper Basin Building knowledge and technological capacity to unconventional ‘crack the code’; second horizontal successfully fracced exploration program Two shale wells are on line and producing Moomba 192 ─ Moomba-191 on line since October 2012 and currently producing 1.7 mmscf/day, total producti
Slide 23: Asia Pacific
Asia Pacific Building a high-margin business in Asia, accounting for over 20% of Santos’ first half of production Block 123, Vietnam Exploration drilling planned for 2016 Warim, Indonesia Data acquisition planning underway by operator Block 12W, Vietnam Chim Sào has produced over Bangladesh 25 milli
Slide 24: Appendix
Appendix September 2014 We have the energy.
Slide 25: 2014 First-half financial result
2014 First-half Growth in sales revenue, EBITDAX and operating cash financial result flow. Underlying profit of $258 million, higher than 2013. 2014 Change First-half on 2013 Production 25 mmboe +2% Sales revenue $1,887 million +25% EBITDAX $950 million +13% Net profit after tax $206 million -24% Un
Slide 26: Strong funding position
Strong funding position $2.7 billion in balance sheet capacity to fund execution of business strategy and minimise financing risk. Minimal debt maturities to 2016 Available liquidity Debt maturity profile Notes mature in 2070, with A$billion A$million Santos option to redeem in 2017 4 2,000 1,600 3
Slide 27: Capital expenditure
Capital expenditure Capex of $1,862 million1 in 1H 2014, full year guidance of $3.5 billion is maintained Full year capital expenditure Breakdown of 1H 2014 capital expenditure (excludes capitalised interest) A$billion Other EA2 0.23 4 $171m Exploration 4.1 0.25 $179m 3.5 Cooper Basin $444m WA&NT $3
Slide 28: 2014 First-half financials
2014 First-half Underlying profit up 3% to $258 million financials Half-year NPAT and underlying profit Reconciliation of half-year underlying profit $million $million 300 400 271 271 35 -29 251 258 -21 300 41 -28 9 200 206 258 251 200 100 100 0 0 1H 2013 Prices and Volume E&E Production Net finance
Slide 29: 2014 guidance
2014 guidance All 2014 guidance is unchanged Item 2014 guidance Production 52-57 mmboe Production costs $820-880 million DD&A expense $18.50/boe Royalty related taxation expense1 (after tax) $60 million Capital expenditure (including exploration & evaluation)2 $3.5 billion 1 Royalty related taxation
Slide 30: 2014 exploration schedule
2014 exploration schedule Delivers on our play-based exploration strategy across Australia and south-east Asia Santos Well Name Basin / Area Target Interest Result/Timing % Manta-1 PNG Gas 301 Gas discovery Gas discovery, Mt Kitty-1 Amadeus Gas 70 evaluation operations suspended Gas discovery with o
Slide 31: Contact information
Contact information Head Office Adelaide Andrew Nairn Ground Floor, Santos Centre Group Executive Investor Relations 60 Flinders Street Direct: + 61 8 8116 5314 Adelaide, South Australia 5000 Email: andrew.nairn@santos.com GPO Box 2455 Andrew Hay Adelaide, South Australia 5001 Telephone: +61 8 8116