Santos Limited · ASX:STO

Santos — Investor Presentation (October 2010)

57 slides from Santos's investor presentation, Oct 12, 2010

1. Slide 1: ASX cover memo: Investor Presentation

   Santos Ltd ABN 80 007 550 923 Ground Floor, Santos Centre 60 Flinders Street Adelaide South Australia 5000 GPO Box 2455 Adelaide South Australia 5001 Direct: + 61 8 8116 5000 Facsimile: + 61 8 8116 6723 For personal use only TO: Company Announcements Office ASX Limited FROM: Company Secretary DATE:

2. Slide 2: Investor Presentation: Delivering Transformational Growth

   For personal use only Chim Sáo wellhead platform topsides installation, July 2010 Investor Presentation Delivering Transformational Growth October 2010 1

3. Slide 3: Disclaimer & Important Notice

   Disclaimer & Important Notice For personal use only This presentation contains forward looking statements that are subject to risk factors associated with the oil and g gas industry. y It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a ra

4. Slide 4: Santos Overview

   Santos Overview For personal use only Regional footprint of operations  One of Australia's leading upstream oil and gas companies i and d has h been b Beibuan Trough Kyrgyz Republic operating since 1954 Phu Khanh Basin Bangladesh  Current production is: Kutei Basin India Timor Sea & Timor Gap - ~6

5. Slide 5: The Santos Strategy

   The Santos Strategy For personal use only Using quality assets, Santos will safely deliver: Base business  Eastern Australia: Margin growth and resource conversion  Indonesia: Established business with incremental growth  WA: Growing a material domestic gas business LNG growth  GLNG: A leading C

6. Slide 6: Reserves and Resources for Growth

   Reserves and Resources for Growth For personal use only mmboe CAGR 14% Reserves & resources/ production* 3 862 3,862 3,937 , 4000 3,474 3,067 3000 2,745 , 2,497 72 years 2,849 2,086 2,595 2000 2,248 1 971 1,971 1,443 1000 793 26 years 394 495 360 378 295 485 518 647 12 years 348 414 441 0 2004 2005

7. Slide 7: Production and sales grow to record levels

   Production and sales grow to record levels For personal use only Sanctioned projects drive production higher Production and Sales (mmboe)  2010 impacted by Cooper 80 flooding, lower Mereenie (contract expiry 70 post Blacktip) & Bayu- Undan (35 (35-day day shutdown) 60  New production from sanction

8. Slide 8: Sound Operating Performance

   Sound Operating Performance For personal use only 2010 Half-year Result Change on 2009 Production 24.2 mmboe (9%) Sales Revenue $1,091 million 7% EBITDAX $655 million 1% Net Profit After Tax $198 million 94% Underlying Net Profit $210 million 121% Operating Cash Flow $537 million 8% Inte im Dividend

9. Slide 9: Funding Growth

   Funding Growth For personal use only  Committed to maintaining current investment grade credit rating - Maintain strong liquidity profile to provide financial flexibility - Prudent management of capital through the cycle  Strong liquidity with A$8 billion of cash and committed debt facilities  Ot

10. Slide 10: Growth in LNG

    For personal use only 9 Growth in LNG

11. Slide 11: LNG is a key component of Santos' Growth Strategy

    LNG is a key component of Santos’ Growth Strategy For personal use only Strategy Bonaparte LNG Components  2mtpa FLNG PNG LNG  Santos 40% with carry to FID  Sanctioned Dec 2009  6.6mtpa two trains Deliver the  First Fi t LNG 2014 Darwin LNG Base Business  Production since 2006  Santos 13.5% 

12. Slide 12: Strategy Delivers Material LNG Growth

    Strategy Delivers Material LNG Growth For personal use only Santos equity LNG production GLNG T1 from existing discovered resources mtpa 6 BLNG 5 4 GLNG T2 3 GLNG T1 2 1 Excludes PNG LNG expansion PNG LNG Darwin LNG 0 2010 2020 11

13. Slide 13: LNG Market is There for Those Who Can Deliver

    LNG Market is There for Those Who Can Deliver For personal use only Asia Pacific LNG Supply-Demand 300 300 250 LNG Demand 250 LNG Contractted Supply (mtpa) Russia East Oman mand (mtpa)) 200 200 PNG Brunei Uncontracted 150 Others Demand 150 LNG Dem 100 Indonesia 100 Malaysia Qatar 50 50 Australia 0 0

14. Slide 14: Changing Market Creates Greater Opportunity

    Changing Market Creates Greater Opportunity For personal use only 80 Asia Pacific "Bedrock" Contracted Supply (mpta) 70 Kenai Arun 60 50 Brunei LNG Bontang 53mtpa mtpa 40 30 MLNG 20 10 NWS 0 2010 2015 2020 2025 13 Source: Wood Mackenzie

15. Slide 15: Continue to See Strong Long Term LNG Pricing

    Continue to See Strong Long Term LNG Pricing For personal use only Asian Term Prices $18 Late 2006  Recent contracts $16 2008-09 point i t to t strong t underlying demand NG Price ($/M MBtu $14  Pricing reflects new Btu) US$12/MMBtu supply-demand Ship LNG Prrice ($/MMB Mid 2006 $12 Oil Parity equi

16. Slide 16: GLNG

    For personal use only 15 GLNG

17. Slide 17: The Project – Two Trains

    The Project – Two Trains For personal use only Upstream Pipeline LNG Plant Shipping Customers Fairview Arcadia Train 1 3.6mtpa FOB 1 Train: Roma 600 TJ/d CSG CSG LNG Portfolio 2 Trains: Gas 1 200 TJ/d 1,200 Train 2 7.2mtpa FOB Storage 16

18. Slide 18: GLNG Milestones Achieved

    GLNG Milestones Achieved For personal use only GLNG is progressing key milestones  Two trains  Project fully staffed  GLNG Operations Pty Ltd, owned by the project shareholders, operates the pipeline and LNG plant  FEED complete for upstream, pipeline and two trains on Curtis Island  Long lead

19. Slide 19: GLNG Reserves and Resources

    GLNG Reserves and Resources For personal use only GLNG has dedicated reserves and resources in excess of 10 tcf  2P reserves exceed GLNG Dedicated Areas (PJ) requirement for first 12,000 train  95% uncontracted and 10 000 10,000 available to project  Dedicated reserves & 8,000 resources in excess

20. Slide 20: GLNG Upstream Update

    GLNG Upstream Update For personal use only  Wells - 59 CSG wells were drilled for GLNG in 1H10 - Key successes with pad drilling and directional drilling in coals (24 wells) - 11 drilling d illi and d completion l ti rigs i devoted d t d to t CSG program  Water - 1.3 1 3 million trees planted  Up

21. Slide 21: Pad Drilling

    Pad Drilling For personal use only Technology innovation will realise value and opportunities Pad Drilling  2-9 wells/pad Gas to processing station Water to plantation/crops  Reduced rig moves  CAPEX and OPEX savings  Facility simplification  Economies of scale  Operator efficiency 20

22. Slide 22: Ramp Gas Strategy

    Ramp Gas Strategy For personal use only Roma gas storage is integral to ramp gas management Roma Storage 600 Withdrawal Gas supplyy (TJ/d) Turndown &/or Portfolio Gas Sales Gas Production G Roma Storage S Injection Existing Domestic Contracts 0 2010 2014 and supports gas supply optimisation 21

23. Slide 23: GLNG Path to FID

    GLNG Path to FID For personal use only GLNG is progressing key milestones to FID  Federal Government environmental decision expected in October  EPC contracts for upstream, pipeline and LNG p plant are being g finalised  Capital cost estimate will be provided to the market ahead of FID  FID firs

24. Slide 24: PNG LNG, Darwin LNG and Bonaparte LNG

    For personal use only PNG LNG, Darwin LNG and Bonaparte LNG 23

25. Slide 25: Papua New Guinea LNG

    Papua New Guinea LNG For personal use only PNG LNG Project construction commences  FID approved pp Dec 2009  6.6 mtpa two trains  Santos 13.5%  Four Asian buyers  Financial Close achieved March 2010  Earlyy works construction, facilities detailed design and procurement activities underway  Fi

26. Slide 26: Papua New Guinea LNG

    Papua New Guinea LNG For personal use only Santos’ acreage and infrastructure position provides opportunity for further growth  First redetermination to follow Papua New Guinea 100km Hides drilling in 2012/13 Hides  Debottleneckingg has the PDL 1 potential to increase off-take LNG Plant PDL 3  3r

27. Slide 27: Bayu-Undan / Darwin LNG

    Bayu-Undan / Darwin LNG For personal use only  Santos’ first producing LNG asset  Santos interest inte est 11 11.5% 5%  Bayu-Undan - producing ~1.1bcf raw gas per day (gross) - Approximately A i t l 103,000 103 000 bbl/d liliquids id (gross) ( )  DLNG 3.6mtpa plant - Successful turbine upgrade d

28. Slide 28: Bonaparte LNG

    Bonaparte LNG For personal use only Partnership with GDF SUEZ unlocks value in 360mmboe of contingent gas resource  Santos has sold 60% of Petrel/Tern/ Frigate to GDF SUEZ for up to US$370 million and a full carry of Santos’ share of costs to FID  The fields are an ideal fit for FLNG: - Low in CO2

29. Slide 29: Burnside Discovery

    Burnside Discovery For personal use only Exploration success… Montara Legend Crux S t acreage Santos Argus Territory of Asmore & Oil field WA-274-P Cartier Islands Gas field WA-410-P Ichthys WA-274-P Poseidon WA 274 P North WA-274-P Concerto Cornea Echuca Prelude Shoals Torosa Ichthys Cas ell Caswel

30. Slide 30: Australia Domestic Gas

    For personal use only Australia Domestic Gas 29

31. Slide 31: Gas is an Underutilised Fuel for Power Generation in Australia

    Gas is an Underutilised Fuel for Power Generation in Australia For personal use only Power Generated from Natural Gas (%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: IEA 2007 Edition; EIA; Santos est. 30

32. Slide 32: Demand for Eastern Australia Gas

    Demand for Eastern Australia Gas For personal use only Demand will nearly triple within 10 years… 2400 2000 1600 Planned Pl d LNG Projects PJ/a 1200 800 Carbon driven fuel switching 400 10 Year Historic Average 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: AEMO, EnergyQuest, Santos, Co

33. Slide 33: Santos' Unique Position Suits the Rapidly Developing Market

    Santos’ Unique Position Suits the Rapidly Developing Market For personal use only  In every producing basin  Infrastructure network in place  Arbitrage value across supply points  Facilitates ramp gas management Hub Potential hub Gas pipeline 32 Moomba Patricia Baleen plant

34. Slide 34: Reports of the Cooper's Death are Greatly Exaggerated

    Reports of the Cooper’s Death are Greatly Exaggerated For personal use only Cooper Gross Reserves and Unrisked Resource Potential Conventional Reserves/Resources Aspirational 75% 2P Recovery Factor 2,866 PJ Cooper infill 2P Current Produced 6,317 PJ Booked Contingent Resources 1,584 PJ 2P Reserves 1

35. Slide 35: Create Supply – Cooper Infill, Beyond the 2P

    Create Supply – Cooper Infill, Beyond the 2P For personal use only Technically robust, multi tcf potential Rock Outcropping of Mesaverde River Deposits Spacing 10 acre 20 acre 40 acre 1986 2006 1999 Green = current Cooper spacing Land Sat Image - Jonah Field (USA) ~200ac 34

36. Slide 36: Reports of the Cooper's Death are Greatly Exaggerated

    Reports of the Cooper’s Death are Greatly Exaggerated For personal use only Gross Unrisked Resource Potential Moomba Unconventional R Resources Developed TOOL DARA Booked Contingent Conventional Resources 4,750 PJ Shale ROSE Undeveloped EPSI Gas MTRE Unconventional Gross gas thickness ~1600 feet Tig

37. Slide 37: Gunnedah Basin – Next Major Play in Coal Seam Gas

    Gunnedah Basin – Next Major Play in Coal Seam Gas For personal use only Basin master position with >50 tcf prospective potential  ESG operated p areas PPL 3 Wilga Park Power Station Narrabri New - Net 2P reserves 724 PJ PEL 434 PAL 2 South Wales PEL 238 Gunnedah - Net 2C resource 951 PJ PEL 1 Tamwo

38. Slide 38: Western Australia Domestic Gas

    Western Australia Domestic Gas For personal use only Exposing Santos to WA resources boom Port Hedland Dampier Demand Onslow 3% Exmouth  No reliance upon wholesalers 17% Sources of demand* and retailers for channels to Alumina 25% market 5% Electricity generation 25% Chemicals 20%  Material market

39. Slide 39: Hub-led Strategy

    Hub-led Strategy For personal use only Santos supplies gas via one of two existing hubs and one new hub under construction… Reindeer Focused NFE John Brookes Spar / Halyard Varanus Is. East Spar Devil Creek Legend …with focused NFE in shallow water close Santos acreage Gas pipeline to existing hubs

40. Slide 40: Hub 1: Varanus Island

    Hub 1: Varanus Island For personal use only Focused NFE  John Brookes - Producing asset - 45% working interest John Brookes - New gas sales at higher prices Spar / - Field capacity +300TJ/d (gross); Halyard East Spar p plant p capacity p y ~230TJ/d (gross) - Opportunities to maximise East Spar Vara

41. Slide 41: Spar / Halyard

    Spar / Halyard For personal use only Apache transaction highlights…  Santos sells 55% interest in Spar to Apache  Santos to receive up to US$116 million − US$31 million upfront − Up to US$85 million in contingent payments  Santos 45% and Apache 55% now equity aligned in 3 key producing and explor

42. Slide 42: Hub 2: Devil Creek/Reindeer

    Hub 2: Devil Creek/Reindeer For personal use only Devil Creek / Reindeer – Reindeer new gas hub  Creation of 3rd WA gas hub  Under development – first gas 2H 2011  45% working interest Focused NFE  Shallow water offshore platform 45kms south west of Dampier  Two train production capacity (field

43. Slide 43: Asia Pacific

    For personal use only 42 Asia Pacific

44. Slide 44: Indonesia: Madura Offshore PSC

    Indonesia: Madura Offshore PSC For personal use only Maleo performing beyond expectation; incremental growth from Peluang  Maleo - Production start-up 29 Sept. Peluang-1 2006 Maleo M d Madura Island I l d - Gross gas production Surabaya ~110 mmscf/d - Reserve upgrade pg at end 2009 Madura Grati - L

45. Slide 45: Indonesia: Sampang PSC

    Indonesia: Sampang PSC For personal use only Oyong Phase 2 delivered on time; incremental growth from Wortel  Oyong Phase 1 (oil) - Production performance above Java Sea expectation at ~3600 bbl/day (gross) Wortel Oyong  Oyong Phase 2 (oil and gas) M d Madura Island I l d - 2.6 million manhours wi

46. Slide 46: Vietnam: Chim Sáo

    Vietnam: Chim Sáo For personal use only Attractive oil project providing medium term growth with upside  Wellhead platform installed July China 2010 Burma Vietnam  Capital expenditure estimate Laos $US270 million net  First oil targeted for 2H 2011; South China Thailand net plateau production ~8,

47. Slide 47: Bay of Bengal

    Bay of Bengal For personal use only Potential for medium term exploitation business in Bangladesh and long term business in India  Bangladesh India - Chittagong gas market significantly undersupplied Bangladesh Sangu India - Sangu well optimisation is Bl k 16 Block extending field life Burma - Free

48. Slide 48: Reference Slides

    For personal use only 47 Reference Slides

49. Slide 49: Reported & underlying profits

    Reported & underlying profits For personal use only 1st Half Reported Underlying NPAT $ $m NPAT 300 120 (5) 210 198 200 102 95 100 0 1st Half 1st Half 1st Half Prices & Other 1st Half 2009 2010 2009 foreign 2010 exchange 48

50. Slide 50: Production impacted by flooding

    Production impacted by flooding For personal use only  2010 full year guidance mmboe 26.7 (0.2) (0.7) (2.0) (1.9) 2.3 24.2 off 49 to 52 mmboe b 30 unchanged 25  Wet weather and flood impact on Cooper 20 Basin production in first half was 2 mmboe 15  Stronger gas 10 production in WA and Indonesia

51. Slide 51: Sales Volumes and Revenue

    Sales Volumes and Revenue For personal use only mmboe 40 29.0 28.5  Higher realised prices for 30 Purchased 28 2.8 allll products d Gas 35 3.5 20  Cooper gas sales volumes 26.2 Produced 25.0 met by production and gas 10 Reserves from storage 0  Higher volumes of third 1st Half 2009 1st Half 2010

52. Slide 52: Production Cost and Cost of Sales

    Production Cost and Cost of Sales For personal use only Production Cost Total Cost of Sales $m $m 300 $266m $276m $23.82 $24.70 per boe per boe Gas 650 p purchases 200 Cost of 450 produced 100 hydrocarbons1 0 250 1st Half 2009 1st Half 2010 1st Half 2009 1st Half 2010 1 Includes production costs, ta

53. Slide 53: Segment EBITDAX Summary

    Segment EBITDAX Summary For personal use only Seg e t Segment Half Year Half Year Change $m 2010 2009 % Eastern Australia 278 303 (8) WA&NT & 312 3 285 85 9 GLNG 15 5 200 Asia Pacific 65 54 20 Gain on sale of assets (3) 22 Corporate and unallocated items (12) (22) 45 TOTAL EBITDAX 655 647 1 Eastern

54. Slide 54: DD&A Declines by $37 million

    DD&A Declines by $37 million For personal use only Rate Volume $m 314 (24) (13) 277  Lower Cooper volumes 350 drive lower depletion rate 300 250  2010 full year guidance of $11.70/boe 200 maintained 150 100 50 0 1st Half 2009 1st Half 2010 $11.76/boe $ / $11.45/boe $ / 53

55. Slide 55: 2010 Guidance

    2010 Guidance For personal use only Item 2010 G id Guidance Production (mmboe) 49 – 52 Production costs ($m) 560 – 580 DD&A expense ($/boe) 11.70 Royalty related taxation expense1 ($m after tax) 70 – 90 Capital expenditure (including exploration & 2,300 evaluation)2 ($m) 1 Royalty related taxation e

56. Slide 56: 2010 Sensitivities

    2010 Sensitivities For personal use only Sensitivity Change NPAT Impact A$m A$ US dollar oil price US$1/bbl 9 Gas price 10 cent/GJ 18 A$/US$ exchange rate 1 cent 8 Interest rates 1% 1 55

57. Slide 57: Contact Information

    Contact Information For personal use only Head office Andrew Nairn Adelaide Group Executive Investor Relations Ground Floor, Floor Santos Centre Level 10, 10 Santos Centre 60 Flinders Street Direct: + 61 8 8116 5314 Adelaide, South Australia 5000 Facsimile: +61 8 8116 5131 GPO Box 2455 Email: andrew

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