Santos Limited · ASX:STO
Santos — Macquarie Australia Conference 2014
32 slides from Santos's conference presentation, May 2014
Slide 1: Macquarie Australia Conference
Macquarie Australia Conference May 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: A leading energy company in Australia and Asia
Santos overview A leading energy company in Australia and Asia One of Australia’s largest domestic gas producers 2013 production 140,000 boe/d (75% gas/25% liquids) Bay of Bengal Phu Khanh Top-20 Australian Securities Exchange listed company Nam Con Son West Natuna Market capitalisation South Sumatr
Slide 4: Our strategy
Our strategy Strong LNG project delivery positions Santos to achieve 80 to 90 mmboe of production by 2020 AUSTRALIA LNG ASIA Growing Cooper Basin gas First LNG production from Peluang project delivered in capacity to meet higher PNG LNG in April 2014, March 2014 on budget and demand and capture high
Slide 5: 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 >$8/GJ 2,000 APLNG 1,500 GLNG New sources of g
Slide 6: Increasing Cooper Basin gas production
Increasing Cooper Basin Targeting three key areas during 2014-16 gas production enabling cost efficiencies from increased scale 2 rig, pad development focus Santos acreage Gas field Moomba High deliverability Oil field Gas pipeline Big Lake Oil pipeline ~70 wells Ballera Jackson Innamincka Extending
Slide 7: Australian shale
Australian shale Cooper and McArthur Basins have some key technical attributes comparable to successful US shale basins Organic matter Hydrocarbon Mineralogy TOC wt% content Non-clay content McArthur Basin mmboe/km2 % Darwin Cooper Tennant Creek Mount Isa McArthur Alice Springs Gladstone Wallumbilla
Slide 8: Cooper Basin unconventional exploration program
Cooper Basin Building knowledge and technological capacity to unconventional “crack the code”; two shale wells now producing exploration program Clear progress along commercialisation pathway: Moomba 192 Confirmed prospective resource through coring, logs and other analysis Proved the Basin Cent
Slide 9: Santos' unique LNG portfolio
Santos’ unique Interests in four LNG projects LNG portfolio with growth opportunities Producing Darwin LNG PNG LNG 11.5% equity 13.5% equity 3.7 mtpa plant capacity 6.9 mtpa plant capacity Fully contracted to 2022 6.6 mtpa contracted to 2034 Under construction GLNG 30% equity (operated) 7.8 mtpa pla
Slide 10: Global LNG demand vs US LNG in 2025
Global LNG demand US LNG alone will not fill the gap vs US LNG in 2025 mtpa Constraints on 500 US LNG exports ─ Buyer appetite for 400 diversity of supply Contestable ~100 mtpa 160 market ─ Not all US LNG projects US LNG will secure financing 300 ~40-60 mtpa ─ LNG plant constructions and labour cons
Slide 11: US LNG pricing
US LNG pricing Portfolio players and trading houses dominate US LNG off-take with higher pricing Sabine Pass LNG pricing - 2012 Portfolio player pricing terms for resale - 2013 US$/mmBtu US$/mmBtu 16 16 Spot $14.6/mmBtu 14 $13.5/mmBtu 14 6.5 3 12 12 10 3 10 8 8 1 1.6 6 6 1.6 6-7 6-7 4 4 2 2 0 0 2020
Slide 12: First LNG from PNG LNG, ahead of schedule
First LNG from PNG LNG, Production from the first LNG train will increase over ahead of schedule coming weeks and the first cargo is expected to be shipped to Asian markets before mid-year. Location Papua New Guinea Project Santos 13.5%, participants ExxonMobil, Oil Search, NPCP, JX Nippon, MRDC, Pe
Slide 13: PNG LNG potential expansion
PNG LNG potential Existing infrastructure can support potential future expansion expansion. As an owner of the foundation project infrastructure, Santos is well placed SW Hides Deep NE Exploration prospect below the existing Hides field Well constrained anticline approximately 700 metres beneath the
Slide 14: GLNG project summary
GLNG project summary The GLNG project is 80% complete and on track for first LNG in 2015 Location Queensland, Australia Project Santos (30% and operator), partners PETRONAS, Total and KOGAS LNG 7.8 mtpa of LNG; 7.2 mtpa has plant been sold to PETRONAS and capacity KOGAS Gross US$18.5 billion1 from F
Slide 15: GLNG upstream
GLNG upstream Continued focus on field development optimisation Drilling performance in 2013 exceeded expectations ─ 237 wells drilled in the GLNG acreage in 2013; 500 wells drilled since project FID ─ Average 2013 drilling and completion costs of $1.35 million per development well First new develop
Slide 16: Fairview & Roma field development
Fairview & Roma field Performance of Fairview wells continues to exceed development expectations - average gas capacity of 1.9 TJ/day per well. Roma performing in line with expectations Fairview well performance Roma well performance (171 producing wells) (50 producing wells) Optimum gas Optimum wat
Slide 17: Upstream construction
Upstream construction Construction of the Fairview Hubs 4 and 5 and Roma Hub 2 is now over 85% complete. Roma Hub 2, April 2014. 17 | INVESTOR PRESENTATION – MAY 2014
Slide 18: Gas transmission pipeline
Gas transmission pipeline The marine crossing tunnel is complete, and over half of the pipeline has been hydrotested Marine crossing tunnel construction is complete and pipeline pushed through All of the mainland and Curtis Island pipeline is in the ground ─ Reinstatement complete for over 90% of pi
Slide 19: LNG trains
LNG trains The installation of Train 1 modules is nearing completion and the first 7 of 29 Train 2 modules have been delivered to site and set on foundations LNG trains, April 2014. 19 | INVESTOR PRESENTATION – MAY 2014
Slide 20: LNG jetty
LNG jetty The LNG jetty is over 95% complete. LNG jetty, April 2014. 20 | INVESTOR PRESENTATION – MAY 2014
Slide 21: GLNG capex US$18.5 billion
GLNG capex US$18.5 billion GLNG gross capital cost estimate unchanged FID to Dec 2013 Capex estimate from FID 2013 capex capex until the end of 2015 $billion A$1 A$1 US$2 A$3 LNG project capex (100%) 5.7 13.7 18.5 20.7 Santos 30% share 1.7 4.1 5.6 6.2 Non-LNG project capex (Santos 30% share) SIB cap
Slide 22: Bonaparte LNG
Bonaparte LNG Competitive concept definition has been completed with consortia FEED bids under evaluation. FEED targeted for mid-2014 Development of Petrel, Tern and Frigate fields, located 250km west of Darwin Floating LNG capacity target 2.4mtpa Federal Government Environmental Approval received C
Slide 23: Asian growth
Asian growth Peluang project delivered on schedule and budget; Dua on track for first oil in mid-2014. Peluang, Indonesia (Santos 67.5%) ─ Project delivered in March 2014, on budget and ahead of schedule ─ Expected gross production rate of 25 mmscf/day Dua, Vietnam (Santos 31.875%) ─ Over 80% comple
Slide 24: Browse Basin
Browse Basin Material resource build to support multiple commercialisation options including collaboration with adjacent resource owners for brownfield expansion Significant resource build Grand prospect Bassett West across the basin discovery ─ Increase in Crown resource through integration of near
Slide 25: Strong business outlook
Strong business outlook Operating cash flow is expected to double by 2016, 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 Committed to increasing
Slide 26: Appendix
Appendix May 2014 We have the energy.
Slide 27: 2013 Full-year financial result
2013 Full-year Growth in sales revenue, EBITDAX and EBIT. financial result Net profit after tax of $516 million in line with 2012 2013 Change Full-year on 2012 Production 51 mmboe -2% Sales revenue $3,602 million +12% EBITDAX $1,992 million +7% EBIT $886 million +6% Net profit after tax $516 million
Slide 28: Strong funding position
Strong funding position $3.4 billion in balance sheet capacity to fund execution of business strategy and minimise financing risk. Minimal debt maturities to 2016 Available liquidity Debt maturity profile Notes mature in 2070, with A$billion A$million Santos option to redeem in 2017 4 2,000 0.4 1,60
Slide 29: Capital expenditure
Capital expenditure 2013 was peak year for capex. 2014 guidance unchanged at $3.5 billion Capital expenditure 2014 guidance of $3.5 billion (excludes capitalised interest) (excluding capitalised interest) A$billion ─ GLNG $1.4 billion 4 3.5 ─ PNG LNG $0.3 billion 4.1 3 3.2 ─ Eastern Australia $1.1 b
Slide 30: 2014 guidance
2014 guidance 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 expense guidance based on an a
Slide 31: 2014 exploration schedule
2014 exploration schedule Delivers on our exploration strategy across super basins, frontier basins and unconventional basins Santos Well Name Basin / Area Target Timing Interest % Manta-1 PNG Gas 301 C&S, pending testing South Sumatra CSG wells Sumatra CSG 102 1H 2014 Gas discovery, Mt Kitty-1 Amad
Slide 32: 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