Santos Limited · ASX:STO
Santos — FY2023 Earnings Presentation
54 slides from Santos's earnings presentation, Feb 21, 2024
Slide 1: Santos announces record cash dividend
ASX / Media Release 21 February 2024 Santos announces record cash dividend Summary • Sales revenue of US$5.889 billion • EBITDAX1 of US$4.083 billion • Underlying profit1 of US$1.423 billion • Final dividend of US17.5 cents per share unfranked (US$569 million) bringing total dividends declared for t
Slide 2: cent of the total annual emissions reduction from Australia’s electricity sector 2 making Moomba
cent of the total annual emissions reduction from Australia’s electricity sector2 making Moomba CCS very significant in Australia’s journey to net-zero emissions. “Our critical fuels are a necessary component in the energy security of Australia and Asia, and will be required to provide affordable an
Slide 3: 2023 Full-Year Results
2023 FULL-YEAR 21 February 2024 RESULTS
Slide 4: Disclaimer and important notice
2023 Full-year results 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 e
Slide 5: 2023 financial overview
2023 Full-year results 2023 financial overview Disciplined operating model delivered robust free cash flow and record cash dividends $5.9 billion $ 4.1 billion $1.4 billion Sales revenue 24% EBITDAX 28% Underlying profit2 42% $2.1 billion 18.4% 17.5 UScps Free cash flow from operations1 42% Gearing3
Slide 6: Returns to shareholders
2023 Full-year results Returns to shareholders Record $852 million in cash returns Free cash flow from operations1 Shareholder returns $ million $ million 3,641 ~$11 billion of cumulative free Record $852 cash flow million in 2023 generated cash returns 700 since 2016 2,128 1,504 569 1,138 500 1,006
Slide 7: Reserves and resources to backfill production
2023 Full-year results Reserves and resources to backfill production Material petroleum resource base with increasing CO2 storage capacity YE 2023 2P reserves and 2C contingent resources2 YE 2023 CO2 storage MtCO2 By location By product type % % 140 2P 2C 12 120 21 32 100 28 4,986 4,986 80 131 mmboe
Slide 8: Personal and Process safety performance
2023 Full-year results Personal and Process safety performance Safety is a core value for Santos and imperative for the success of our operations6 Lost time injury rate1 Loss of containment incident rate3, Tier 1 and 2 Rate per million hours worked Rate per 100mmboe available capacity2 Available Cap
Slide 9: 2023 Highlights
2023 Full-year results 2023 Highlights Upstream Gas and Liquids: EBITDAX1 $3,954 billion Santos Energy Solutions: EBITDAX1 $212 million GLNG Eastern Australia Hub • Incremental production from horizontal wells drilled with >2.5km lateral length • Moomba CCS Project 80 per cent complete, commissionin
Slide 10: Barossa Gas project update
2023 Full-year results Barossa Gas project update Fast-tracked work on Barossa gas project, trajectory to deliver first gas in Q3 2025 Drilling Pipelay SURF1 FPSO started underway program on track Drilling commenced following The engineering, procurement, EP approval in December 2023 construction an
Slide 11: Santos' LNG portfolio
2023 Full-year results Santos’ LNG portfolio Quality LNG customer base, strong contracted pricing, volume weighted average slope >14 per cent3 High quality portfolio of assets to meet growing Asian demand Proximal to Asian demand centres Source: Kpler - • Four world class LNG assets sustaining Santo
Slide 12: Santos' Energy Solutions carbon portfolio
2023 Full-year results Santos’ Energy Solutions carbon portfolio Generating a high quality carbon portfolio, leveraging our 3000+ landholder agreements, targeting ~$15 - $25/tonne cost of supply for current projects1 Carbon Credit Generation Projects 2,3 Carbon Capture and Storage Capacity Growth4 M
Slide 13: Strategic focus
2023 Full-year results Strategic focus Barossa cash flows only ~18 months away, Pikka on track for 1H2026 Free cash flow from operations1 0.6 ~$5.1b $ billion Free cash flow per share2 US$ per share 0.4 0.3 ~$3.5b Papua LNG and Narrabri $2.1b online4 Barossa, Pikka Phase 1 and Bayu CCS EQ growth and
Slide 14: Santos' investment proposition
2023 Full-year results Santos’ investment proposition A diversified and cash-generative portfolio driving shareholder returns and well-positioned for the energy transition A high-quality Strong cash Decarbonising Developing new portfolio of generation supports our business earnings streams diversifi
Slide 15: Finance and Capital Management
FINANCE AND CAPITAL MANAGEMENT
Slide 16: 2023 financial achievements
2023 Full-year results 2023 financial achievements Disciplined capital management and significant returns to shareholders $2.1 billion $4.1 billion $7.61/ boe Free cash flow from 42% EBITDAX 28% Unit production costs1 11% operations $569 million $4.5 billion <$28/ bbl Final dividend declared 14% Liq
Slide 17: Capital Management Framework
2023 Full-year results Capital Management Framework Disciplined operating model and capital management framework provide for the delivery of Santos’ strategy Disciplined operating model Cash from operations Sustaining capital 1 Free cash flow from operations 2 Maintain strong balance sheet Returns t
Slide 18: Maintaining cost discipline
2023 Full-year results Maintaining cost discipline Unit production costs down despite inflationary pressure Unit production costs Disciplined Operating Model $/boe • Unit production costs delivered within guidance. • Free cash flow breakeven <$28 per barrel in 2023 unhedged (<$22 per barrel hedged)
Slide 19: Major project capex for committed activities
2023 Full-year results Major project capex for committed activities Major project capex commitments decreasing allowing optionality for capital allocation from 2025+ Major project capex for committed activities1,2 • 2024 major project capex guidance unchanged $ million – Santos Energy Solutions proj
Slide 20: Free cash flow from operations
2023 Full-year results Free cash flow from operations Significant free cash flow from operations of $2,128 million, providing ongoing returns to shareholders Operating cash flow Investing cash flow1 Free cash flow from operations2 $ million $ million $ million 4,558 3,641 3,258 2,272 2,046 2,128 1,5
Slide 21: Strong underlying earnings continue
2023 Full-year results Strong underlying earnings continue Strong sales revenue helps Santos to deliver another year of solid underlying earnings from the base business Product sales revenue EBITDAX Underlying profit1 $million $million $million 7,790 5,646 5,889 2,641 4,083 4,713 4,033 3,660 2,805 3
Slide 22: Financial snapshot
2023 Full-year results Financial snapshot Revenue of $6 billion and EBITDAX margin >65%, despite lower volumes and commodity prices Northern 2023 results Queensland Australia & Western Santos Energy summary1,2,3 Cooper Basin & NSW PNG Timor-Leste Australia Solutions Santos Total revenue 622 1,332 2,
Slide 23: Balance sheet positioned to deliver strategy
2023 Full-year results Balance sheet positioned to deliver strategy Strong balance sheet continues to support capital allocation priorities Net Debt & Gearing1 Strong Liquidity and balance sheet US$ million % Net debt Gearing • Total liquidity of $4.5 billion1,2 6,000 40 • Gearing2 at 18.4% excludin
Slide 24: Long-dated debt maturity profile
2023 Full-year results Long-dated debt maturity profile Long-term debt maturity provides increased stability and financial flexibility Drawn debt maturity profile1 Long-dated debt maturity profile US$ million 1000 • Active debt portfolio management - earliest drawn debt maturity in September 20272 8
Slide 25: Upstream Oil and Gas: Eastern Australian and PNG Business Unit
UPSTREAM OIL AND GAS: EASTERN AUSTRALIAN AND PAPUA NEW GUINEA BUSINESS UNIT
Slide 26: Cooper Basin
2023 Full-year results Cooper Basin Cost and cycle time reductions Production volumes Wells drilled mmboe Number of wells per year 16.8 15.5 15.8 15.3 14.4 14 13.6 • Consistent well performance 23 1 22 11 • Drilled 108 wells 23 36 23 • Strong oil performance 9 25 12 • 90% casing success rate 18 24 1
Slide 27: GLNG
2023 Full-year results GLNG Delivered largest annual well delivery program since FID to support continued production growth GLNG sales gas production Mean time between failure TJ/day (gross) Years (Roma) 681 682 695 596 637 • Scotia delivering significantly above 6.4 • Driving down operating cost an
Slide 28: PNG
2023 Full-year results PNG Higher facility reliability and field performance delivering LNG volumes above expectation Production Strong operated field delivery Operated facility reliability Reliable infrastructure Mmboe STO % • Maximising compression throughput with • Operated oil and gas production
Slide 29: Unsanctioned upstream projects
2023 Full-year results Unsanctioned upstream projects Pipeline of growth opportunities to backfill and sustain the business Papua LNG Narrabri • Dorado • 5.6 Mtpa, gross nominal capacity (Santos share ~1 Mtpa)1 • Target FID-ready 20252 • Upstream and Downstream FEED tenders progressing in 2024 • 150
Slide 30: Upstream Oil and Gas: Western Australian, Northern Australia and Timor-Leste
UPSTREAM OIL AND GAS: WESTERN AUSTRALIAN, NORTHERN AUSTRALIA AND TIMOR-LESTE BUSINESS UNIT
Slide 31: Major project delivery update: Barossa
2023 Full-year results Major project delivery update: Barossa Progressing forward, 2024 will deliver significant project momentum towards first gas in 2025 Project Status Project phase and • 67.4% Complete1 update • FPSO has 10 of 16 topside modules installed to February and is 80 per cent complete1
Slide 32: Western Australia
2023 Full-year results Western Australia Delivering sales gas to support the domestic market Production volumes Delivering volumes Unsanctioned Upstream projects mmboe • Spartan gas field online Q2 • Reindeer gas cycling strategy 30.9 31.1 33.7 successfully prolonging field life Dorado: 27.8 21.1 •
Slide 33: Northern Australia and Timor-Leste
2023 Full-year results Northern Australia and Timor-Leste Bayu-Undan delivered LNG through 2023, now delivering gas to the domestic market Production volumes Sustaining production mmboe • Bayu-Undan field produced throughout 2023 14.5 15.2 • 7 LNG and 4 liquids cargoes lifted in 2023 4.0 5.5 • Final
Slide 34: Upstream Oil and Gas: Alaska Business Unit
UPSTREAM OIL AND GAS: ALASKA BUSINESS UNIT
Slide 35: Major project delivery update: Pikka Phase 1
2023 Full-year results Major project delivery update: Pikka Phase 1 The right project at the right time in the right location Project Status Project phase • 37.4% complete • Drilling on schedule; 6th well spudded end December • Modules for hydrocarbon processing, well site and connecting infrastruct
Slide 36: Major project delivery update: Pikka Phase 1 well results
2023 Full-year results Major project delivery update: Pikka Phase 1 Well results to date are in line with expectations • Drilling on schedule, with five wells rig released as of 31 December 2023 • Two have now been stimulated and flowed back, one injector and one producer • Modelled results satisfy
Slide 37: Santos Energy Solutions
Santos SANTOS ENERGY SOLUTIONS
Slide 38: Major project delivery update: Moomba CCS
2023 Full-year results Major project delivery update: Moomba CCS World-class CCS project targeting a project lifecycle breakeven < ~US$24/tonne Project Status Project phase • Execution, 80% complete • Continued construction at Moomba Plant • Pipeline and 4 x injection wells complete 2023 milestones
Slide 39: Midstream infrastructure: providing optionality
2023 Full-year results Midstream infrastructure: providing optionality Running a strong portfolio of strategic assets for value Eastern Australia Hub Northern Hub Western Australia Hub Moomba Port Bonython Darwin LNG Varanus Island Devil Creek Nameplate throughput Gas: 400 TJ/d LNG: 3.7 mtpa, approv
Slide 40: Decarbonisation: hubs fostering opportunities
2023 Full-year results Decarbonisation: hubs fostering opportunities CCS Hubs across the country providing opportunities to decarbonise Santos production and wider industry Eastern Australia Hub Northern Hub Western Australian Hub Moomba Darwin and Bayu-Undan Reindeer FEED nearing completion Targeti
Slide 41: Carbon Solutions: nature-based projects
2023 Full-year results Carbon Solutions: nature-based projects Actively building a portfolio of high-quality nature-based carbon solutions to support the needs of the business Nature based projects (PNG) Nature based projects (Alaska) Nature based projects (Australia)) Estimated Future Emissions ~8
Slide 42: Appendix
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Slide 43: 2023 Financial performance
2023 Full-year results 2023 Financial performance Consistently strong financial results despite lower realised prices and a high inflationary environment 2023 2022 • Total revenue down due to lower volumes and lower realised prices. $million $million • Third-Party product purchases have decreased si
Slide 44: Sales revenue
2023 Full-year results Sales revenue Diverse portfolio servicing both domestic and international markets 2023 Total product sales1 2023 Sales revenue product % % 1 15 11 7 19 11 2 Gas & Ethane Cooper Basin QLD & NSW LNG 23 PNG Crude Oil Condensate/Napthha Northern Australia LPG WA 49 62 1. Does not
Slide 45: Free cash flow from operations
2023 Full-year results Free cash flow from operations Calculation of 2023 full year free cash flow from operations Lease liability payments are treated as financing cash flows under AASB 16. To ensure like-for-like 2023 2022 comparisons with prior periods, the definition of $million free cash flow r
Slide 46: Significant items
2023 Full-year results Significant items Reconciliation of full-year net profit to underlying profit 2023 2022 $ million Net profit after tax 1,416 2,112 Add/(deduct) significant items after tax: Net gain on sales of non-current assets (3) (13) Impairment losses 52 224 Fair value loss on commodity h
Slide 47: 2024 guidance
2023 Full-year results 2024 guidance 2024 Guidance Production 84-90 mmboe Sales volumes 87-93 mmboe Capital expenditure – ~$1.25 billion sustaining capital, including decommissioning Capital expenditure – ~$1.6 billion major projects including Santos Energy Solutions Unit production costs ($/boe) $7
Slide 48: Liquidity and net debt
2023 Full-year results Liquidity and net debt Net debt $4,264 million. Liquidity of $4,526 million 31 December 2023 31 December 2022 Liquidity $million $million Cash and cash equivalents 1,875 2,352 Committed (undrawn) bank facilities) 2,615 3,115 Assets held for sale - cash 36 78 Total liquidity 4,
Slide 49: 2023 Full-year segment results summary
2023 Full-year results 2023 Full-year segment results summary Santos Corporate, Northern Upstream Energy Eliminations, Queensland Australia & Western Gas & Solutions Non-core,& 2023 results summery Cooper Basin & NSW PNG Timor-Leste Australia Liquids Total Total other Total Santos Product sales to e
Slide 50: 2022 Full-year segment results summary
2023 Full-year results 2022 Full-year segment1 results summary Santos Corporate, Northern Upstream Energy Eliminations, Queensland Australia & Western Gas & Solutions Non-core,& 2022 results summery Cooper Basin & NSW PNG Timor-Leste Australia Liquids Total Total other Total Santos Product sales to
Slide 51: Definitions and abbreviations
2023 Full-year results Definitions and abbreviations ACCU Australian Carbon Credit Unit. Each ACCU issued represents one tonne of carbon dioxide e-methane Fuels produced by combining hydrogen with carbon dioxide to produce methane. This equivalent (tCO2e) process is called methanation and it can pot
Slide 52: Definitions and abbreviations
2023 Full-year results Definitions and abbreviations Low carbon fuels Fuels that Santos may seek to develop with materially lower net greenhouse gas emissions Reserves The ratio of the change in petroleum reserves (excluding production) divided by production. in their production, processing and use
Slide 53: NDB-024 summary
2023 Full-year results NDB-024 summary Information in the following table is provided to ensure compliance with ASX Listing Rule 5.30. No Requirement: Information: (a) The name and type of well. NDB-024 horizontal development well Lease no: ADL 392984, 393020, 391455, 393018, 391445 (b) The location
Slide 54: NDB-043i summary
2023 Full-year results NDB-043i summary Information in the following table is provided to ensure compliance with ASX Listing Rule 5.30. No Requirement: Information: (a) The name and type of well. NDB-043i horizontal development well Lease no: ADL 392984, 391445, 393020 (b) The location of the well a