Santos Limited · ASX:STO

Santos — CLSA Investors' Forum 2013

41 slides from Santos's conference presentation, September 2013

  1. Slide 1: CLSA Investors' Forum

    CLSA Investors’ Forum Hong Kong, September 2013

  2. 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

  3. Slide 3: Santos – A leading energy company in Australia and Asia

    Santos – A leading energy company in Australia and Asia  Australia’s largest domestic gas producer  2012 production 142,000 boe/d (75% gas/25% liquids) Bay of Bengal  Top-20 Australian Securities Phu Khanh Basin Exchange listed company  Market capitalisation Nam Con Son Basin US$15 billion (Sept

  4. Slide 4: Santos vision and strategy

    Santos vision and strategy LNG markets Dual channel strategy LNG channel Domestic channel Strong Focused Australian Asian A leading base growth energy company in Australia and Asia A leading gas producer in high-growth markets 4

  5. Slide 5: Delivering 80-90 mmboe of production by 2020

    Delivering 80-90 mmboe of production by 2020 Upside potential Aust: Cooper shale, Cooper tight gas, Zola, Winchester, Amadeus, McArthur LNG: PNG LNG expansion, Browse Asia: Vietnam, Indonesia CSG, AAL Likely sanction Aust: Narrabri LNG: Bonaparte LNG Sanctioned Sanctioned Aust: Cooper infill, Kipper

  6. Slide 6: Santos portfolio transformation becoming a reality

    Santos portfolio transformation becoming a reality  Clear growth outlook to 2016 and beyond  2H 2013 Fletcher Finucane, Cooper infill Production  2014 Dua, Peluang, PNG LNG growth  2015 GLNG  Revenues increasingly oil price linked  Clear evidence of rising domestic gas prices Margin growth  B

  7. Slide 7: Building a transformational LNG portfolio

    Train 1 propane condenser module in place on Curtis Island Building a transformational LNG portfolio

  8. Slide 8: New sources of supply will be required to meet robust global demand for LNG

    New sources of supply will be required to meet robust global demand for LNG mtpa Global LNG demand and supply 500 Pacific Basin Demand 400 Atlantic Basin Demand ~40* trains Global Contracted Supply & Contract Rollovers 300 200 100 0 1 2000 2 2005 3 2010 20154 2020 5 2025 6 Source: Santos interpretat

  9. Slide 9: US LNG exports are not expected to overwhelm the market

    US LNG exports are not expected to overwhelm the market mtpa Global LNG demand vs US LNG supply in 2025 500 450 400 Contestable Market ~100 mmtpa 166 350 US LNG ~40-60 mmtpa 300 250 200 Contracted Supply & Contract Rollovers (ex 150 287 USA) 100 50 0 2025 US LNG Source: Wood Mackenzie, Contracted Su

  10. Slide 10: LNG Pricing: Henry Hub-linkage vs oil-linkage

    LNG Pricing: Henry Hub-linkage vs oil-linkage US$/mmBtu Oil-linked LNG 20 at US$120/bbl 18 16 14 $3 12 $1 $3 Oil-linked LNG at 10 US$80/bbl 8 $6.50 6 4 2 0 2020 Forecast Liquefaction Other Shipping Traditional Priced LNG Source: Henry Hub 2020 forecast provided by PIRA; “Other” includes Pipeline & F

  11. Slide 11: Santos' unique LNG Portfolio

    Santos’ unique LNG Portfolio Darwin LNG (Santos 11.5%) PNG LNG (Santos 13.5%) Production since 2006 First LNG expected in 2H 2014 Operator: ConocoPhillips Operator: ExxonMobil GLNG (Santos 30%) Bonaparte LNG (Santos 40%) First LNG expected in 2015 Proposed floating LNG Operator: Santos Operator: GDF

  12. Slide 12: Santos' LNG projects are fully contracted with major Asian buyers at oil-linked prices

    Santos’ LNG projects are fully contracted with major Asian buyers at oil-linked prices DLNG PNG LNG GLNG Contracted to Contracted to Contracted to 2023 2034 2035 3.4 mtpa Santos share of long-term, oil-linked contracts in place 12

  13. Slide 13: PNG LNG is over 90% complete and on track for first LNG in 2H 2014

    PNG LNG is over 90% complete and on track for first LNG in 2H 2014 Project PNG LNG Location Papua New Guinea Project Santos 13.5%, ExxonMobil 33.2% and participants operator, Oil Search, Nippon Oil, State of PNG Project scope  Upstream gas & condensate fields  Gas transmission pipeline  2-train L

  14. Slide 14: Construction at Hides is progressing to plan

    Construction at Hides is progressing to plan Hides Gas 14 Conditioning Plant

  15. Slide 15: Commissioning underway at the PNG LNG plant

    Commissioning underway at the PNG LNG plant LNG plant 15 site, Caution Bay

  16. Slide 16: PNG LNG expansion

    PNG LNG expansion  Potential areas for expansion are being assessed - Hides development drilling underway  Plans are being developed to drill Hides Deep in 2015 (Santos 24% equity) - Optimal access to project infrastructure 16

  17. Slide 17: GLNG is over 60% complete and on track for first LNG in 2015

    GLNG is over 60% complete and on track for first LNG in 2015 Project GLNG Location Queensland, Australia Project Santos 30% and operator, participants PETRONAS, Total and KOGAS Project scope  Upstream gas fields Arcadia Area  420-km pipeline  2-train LNG plant LNG plant 7.8 mtpa of LNG; 7.2 mtpa

  18. Slide 18: GLNG - CSG drilling

    GLNG - CSG drilling  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 per development well − Average drilling cost of $1.1 million − Average completio

  19. Slide 19: GLNG - Upstream construction

    GLNG - Upstream construction Fairview 19 Hub 4

  20. Slide 20: GLNG – Gas transmission pipeline on track for completion in 2Q 2014

    GLNG – Gas transmission pipeline on track for completion in 2Q 2014  Construction of 420-kilometre pipeline well underway − All private landholder approvals have been obtained − Clearing and grading over 90% complete − Stringing is over 80% complete − Over 70% of the total pipeline length has been

  21. Slide 21: GLNG – significant downstream progress

    GLNG – significant downstream progress LNG jetty LNG tanks LNG Train211 Unloading at the MOF

  22. Slide 22: Darwin LNG/Bayu-Undan – continued strong production and cashflow

    Darwin LNG/Bayu-Undan – continued strong production and cashflow  Santos 11.5%, ConocoPhilips operator  Capacity 3.7mpta, LNG production since 2006  Track record of reliable delivery (more than 350 cargoes)  Land available for Darwin LNG expansion, government approval in place for up to 10 mtpa

  23. Slide 23: Bonaparte LNG – proposed floating LNG

    Bonaparte LNG – proposed floating LNG  Santos (40%) and GDF SUEZ (60%, Operator)  Development of Petrel, Tern and Frigate fields located 250km west of Darwin in the Timor Sea  Floating LNG technology, producing 2.4 mtpa  Federal Government Environmental Approval received in October 2012  Curren

  24. Slide 24: BLNG – targeting a final investment decision in 2015

    BLNG – targeting a final investment decision in 2015 24

  25. Slide 25: Leading Australian domestic producer

    Devil Creek gas plant, Western Australia Leading Australian domestic producer

  26. Slide 26: Unprecedented growth in Eastern Australia gas market is increasing gas prices

    Unprecedented growth in Eastern Australia gas market is increasing gas prices and unlocking more resources Eastern Australia gas supply costs (ex-field) $/GJ $16 $14 Contracted Uncontracted LRMC (Real $2012-13) $12 $10 $8 Santos price range of $6-$9/GJ $6 $4 $2 $0 0 50,000 100,000 150,000 200,000 Re

  27. Slide 27: Unconventional acreage footprint

    Unconventional acreage footprint Since 2009 Santos has increased its unconventional acreage footprint onshore Australia four-fold to 231,000km2 (57m acres) McArthur Basin Cooper Basin  Liquids-rich shale  Success with play Moomba-191  Seismic program  9-well exploration scheduled for 3Q drilling

  28. Slide 28: Cooper unconventional

    Cooper unconventional REM shale play  Moomba-191 currently flowing at 2 mmscf/day Gaschnitz discovery  Three follow-up vertical/horizontal pairs to further appraise the play Basin Centred Gas play  Gaschnitz-1 well confirmed a continuous gas accumulation in the Nappamerri Trough Moomba-191  Init

  29. Slide 29: 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

  30. Slide 30: Browse Basin – Crown and Bassett West successes unlock material play

    Browse Basin – Crown and Bassett West successes unlock material play; Dufresne drilling ahead Grande Dufresne-1 Bassett West  Crown gas–condensate prospect discovery discovery (Santos 30%) - 61 metres net gas pay in Jurassic-aged Montara, Plover and Malita sandstones  Bassett West discovery Crown

  31. Slide 31: 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

  32. Slide 32: Focused growth in Asia

    Insert picture Focused growth in Asia

  33. Slide 33: Focus on three core countries; Indonesia, Vietnam and PNG

    Focus on three core countries; Indonesia, Vietnam and PNG  Three offshore assets in East Java Sea, comprising 10% of Santos’ 2012 production  Peluang gas project over 20% complete; on Indonesia track for first gas in 1H 2014  Acquisition of a 50% interest and operatorship in Ande Ande Lumut oil f

  34. Slide 34: 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

  35. Slide 35: 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

  36. Slide 36: Reference slides

    PNG LNG jetty Reference slides

  37. Slide 37: 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

  38. Slide 38: $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

  39. Slide 39: 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,

  40. Slide 40: 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

  41. Slide 41: 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

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