Slide 1: 2016 Half-year results
2016 Half-year results 19 August 2016
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: 2016 Half-year performance overview
2016 Half-year performance overview Kevin Gallagher Managing Director and Chief Executive Officer
Slide 4: Strategic priorities
Strategic priorities Create sustainable shareholder value by becoming a low- cost, reliable and high performance business Short-term priority is to stabilise the business and increase operating cash flow Aim to be free cash flow breakeven at US$35-40/bbl on a portfolio basis Good progress on operati
Slide 5: 2016 first-half financial performance
2016 first-half financial Net loss of US$1,104 million including GLNG performance impairment Net loss Underlying net loss EBITDAX US$1,104 million US$5 million US$491 million reflects previously announced GLNG impairment of US$1,050 million after US$30 million on 1H15 US$309 million on 1H15 tax and
Slide 6: 2016 first-half operational performance
2016 first-half operational Record first-half production. performance Costs lower and new centralised operating model established 2016 forecast free cash flow breakeven1 Record first-half production of 31.1 mmboe, up 10% on 1H15 US$47.00/bbl Capital expenditure2 ─ US$283 million, down 58% on 1H15 Up
Slide 7: Safety performance
Safety performance Lost time injury frequency rate of 0.12 per million hours worked to 30 June 2016. Strong safety performance maintained Safety performance (employees and contractors) Rate per million Work hours hours worked (million) 2 1.92 40 30 1.17 1.06 1 0.85 20 0.74 0.64 0.67 10 0.12 0.12 0 0
Slide 8: 2016 Half-year financial results
2016 Half-year financial results Andrew Seaton Chief Financial Officer
Slide 9: Financial summary
Financial summary Focus remains on improving cash flow and debt reduction Stabilised the business to reflect the low oil price environment Operations performing well, record first half production and lower cost base GLNG train 2 commissioning marks end of six year major LNG investment phase Free cas
Slide 10: Financial performance
Financial performance EBITDAX down 39% to US$491 million. Net loss of US$1,104 million, reflecting asset impairments of US$1,061 million after tax First-half First-half Higher sales volumes more than US$ million Var 2016 2015 offset by lower oil and LNG prices Revenue (inc. third party) 1,205 1,277
Slide 11: Production
Production Strong operational performance resulting in record first-half production Production First-half production up 10% mmboe 37% increase in LNG 35 production reflecting start-up of 31.1 30 GLNG train 1 in September 28.3 2015 and GLNG train 2 in May 25.4 24.5 25.0 25 2016 20 2016 guidance maint
Slide 12: Sales revenue
Sales revenue Sales revenue lower due to lower realised oil and LNG prices Lower sales revenue as a result of lower oil prices and LNG prices, partially offset by increased LNG sales volumes predominantly First-half First-half US$ million Var from the start-up of GLNG 2016 2015 Sales Revenue (incl.
Slide 13: Production costs
Production costs Upstream unit production costs down 15% First-half First-half Var Upstream unit production costs down US$ million 2016 2015 15% to US$8.80 per boe Total production costs 273 293 (7)% ─ Cooper Basin down 15% Upstream unit production 8.8 10.4 (15)% ─ PNG LNG down 16% cost (US$/boe) Ot
Slide 14: Capital expenditure
Capital expenditure Capital expenditure US$283 million, down 58%. 2016 capex guidance US$750 million Full-year capital expenditure US$ million US$ million First-half 2016 First-half 2015 Cooper Basin 88 212 GLNG 90 172 1,571 WA&NT PNG LNG Other EA2 1 35 $59m $50m WA&NT 15 46 Asia 37 12 Exploration 4
Slide 15: Net debt
Net debt Net debt reduced to US$4.5 billion Reconciliation of net debt Net debt US$4.5 billion at 30 US$ million June 2016 43 47 US$3.3 billion in liquidity 4,749 (411) (291) 391 4,528 ─ US$1.0 billion in cash ─ US$2.3 billion in undrawn bilateral facilities No material drawn debt maturities until 2
Slide 16: 2016 Half-year operational results
2016 Half-year operational results Kevin Gallagher Managing Director and Chief Executive Officer
Slide 17: Building shareholder value
Building shareholder value Framework established to become a low-cost, reliable and high performance business Growth Funds prioritised to deliver an Efficiency optimal return on capital employed Targeting free cash flow breakeven of US$35 to US$40 per barrel on a Disciplined allocation of capital St
Slide 18: New leadership team
New leadership team Asset based management structure. Decision making and planning processes centralised Kevin Gallagher Managing Director & CEO Commercial & Strategy & EHS & Exploration Development Production Business CFO Corporate Governance Development Services Bill Ovenden Brett Woods Vince Sant
Slide 19: Cooper Basin
Cooper Basin Maximise value, improve margins and de-risk exposure Cooper Basin gas well costs Significant cost reductions achieved but more to be done A$ million Cooper Basin unit production costs US$11.10/boe, down 15% on 1H15 7.3 6.4 Cooper Basin gas well D&C costs down to A$5.3 million per well 5
Slide 20: GLNG
GLNG Successful start-up and commissioning. 50 LNG cargoes shipped to date Successful start-up and commissioning of trains 1 and 2 ─ train 2 first LNG May 2016; practical completion July 2016 ─ 50 cargoes shipped since start-up in September 2015 ─ 3 million tonnes of LNG produced Aim is to be an ind
Slide 21: Papua New Guinea
Papua New Guinea PNG continues to deliver with expansion opportunities opening up Strengthen and consolidate position ─ footprint supportive of long-term commitment to the region PNG LNG production continues to exceed expectations ─ 7.7 mtpa annualised production rate in 2016 ─ 214 cargoes delivered
Slide 22: Northern Australia
Northern Australia Significant resource base across Northern Australia is well positioned for brownfield backfill opportunities Strong performance from Bayu Undan and Darwin LNG Successful three well appraisal campaign in Barossa completed in 2015 ─ project partners have committed to an extensive en
Slide 23: 2016 First-half summary
2016 First-half summary Create sustainable shareholder value by becoming a low-cost, reliable and high performance business Full review of asset portfolio completed Business restructured and new operating model implemented Leadership team established Disciplined approach to the allocation of capital
Slide 24: Reference Slides
Reference Slides 19 August 2016
Slide 25: Liquidity and net debt position as at 30 June 2016
Liquidity and net debt US$3.4 billion in cash and committed undrawn debt position as at facilities. 30 June 2016 Net debt US$4.5 billion Liquidity (US$ million) 30 June 2016 Cash 1,034 Undrawn bilateral bank debt facilities 2,339 Total liquidity 3,373 Debt (US$ million) Export credit agency supporte
Slide 26: Debt maturity profile
Debt maturity profile Santos has limited drawn debt maturities until 2019 Drawn debt maturity profile as at 30 June 2016 US$million 1,800 Notes mature in 2070, with Santos option to redeem on 22 1,600 1,572 September 2017 and at each interest payment date 1,400 thereafter 1,200 1,112 1,000 800 600 4
Slide 27: Significant items after tax
Significant items after tax Reconciliation of full-year net loss to underlying profit $million 1H 2016 1H 2015 Net profit/(loss) after tax (1,104) 30 Add/(deduct) significant items Impairment losses 1,061 - Redundancy and restructuring costs 17 7 Onerous contract 18 - Other 3 (12) Underlying profit/
Slide 28: 2016 Guidance
2016 Guidance Item 2016 guidance Production 57-63 mmboe Sales volumes (including third party product sales) 76-83 mmboe Upstream production costs (excl. LNG plant costs) US$9-10/boe produced Depreciation, depletion & amortisation (DD&A) expense US$800 million Capital expenditure (incl. exploration,
Slide 29: 2016 Half-year results Contact information
2016 Half-year results Contact information Head Office Adelaide Andrew Nairn Ground Floor, Santos Centre Head of 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 Telepho