Please find attached Santos UK Roadshow Investor Presentation, being presented at the Citi Conference in London on Monday 5 March, 2012.

Transcription

1 Santos Ltd ABN Ground Floor, Santos Centre 60 Flinders Street Adelaide South Australia 5000 GPO Box 2455 Adelaide South Australia 5001 Direct: Facsimile: TO: FROM: ASX Market Announcements ASX Limited Company Secretary DATE: 5 March 2012 SUBJECT: UK Roadshow Investor Presentation Please find attached Santos UK Roadshow Investor Presentation, being presented at the Citi Conference in London on Monday 5 March, David Lim Company Secretary

2 Investor Presentation March 2012 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 could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, geotechnical factors, drilling and production results, gas commercialisation, development progress, operating results, engineering estimates, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates. All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated. 2 1

3 Santos overview A leading energy company in Australia and Asia Australia s largest domestic gas producer Current production of 535 mmscf/d gas and 30 kbbls/d liquids Top 25 ASX listed company Market capitalisation of US$14 billion (February 2012) Key statistics (as at December 2011) Proved reserves 649 mmboe Proved & probable reserves 1,364 mmboe Contingent resources 2,162 mmboe 2011 production 47 mmboe 2011 proved & probable reserve replacement ratio 173% * Fergana Basin Bay of Bengal Nam Con Son Basin East Java Basin South Sumatra Bonaparte Basin Browse Basin Exploration Development Production Carnarvon Basin Phu Khanh Basin Amadeus Basin Cooper Basin Timor Sea & Gap Otway Basin Papua New Guinea Surat/Bowen Basins Gunnedah Basin Gippsland Basin * P organic RRR 3 Santos vision and strategy LNG markets LNG CHANNEL Strong Australian base DOMESTIC CHANNEL Focused Asian growth A leading energy company in Australia and Asia A leading gas producer in high-growth markets 4 2

4 Delivering mmboe of production by 2020 Reindeer and Wortel now producing; Fletcher Finucane sanctioned mmboe 100 Production Upside potential Aust: Cooper shale, Amadeus, Zola, Winchester, Sole LNG: PNG LNG T3, Browse, Caldita/Barossa Asia: Chim Sáo upside, Dua, Bay of Bengal, Fergana Basin, Indonesia CSG Sanctioned Likely sanction Likely sanction Aust: Gunnedah LNG: Bonaparte LNG Asia: Peluang Sanctioned Aust: Fletcher Finucane, Cooper infill, Kipper LNG: PNG LNG, GLNG 5 30 Producing 20 Producing Aust: Cooper Basin, Carnarvon Basin, Queensland CSG, offshore Victoria LNG: Darwin LNG 10 Asia: Chim Sáo, Indonesia, Sangu, SE - Gobe Safety A balanced focus on personnel and process safety Personnel safety TRCFR performance (employees and contractors) Process safety Safety critical compliance long-term trend Total recordable case frequency rate (per million hours worked) % 100% 95% 90% 85% 80%

5 Working with local landholders and communities Australia s largest domestic gas producer, Santos has a 50-year track record of safe, sustainable operations We are committed to working with local landholders and contributing to communities We will work in partnership with agriculture for sustainable resource management delivery Target Delivery Safety TRCFR 3.3, best performance in company history Production 47.2 mmboe, within guidance range Projects delivered on plan Sanction of new projects Exploration success Portfolio optimisation Strong balance sheet Spar: on time and budget Chim Sáo: on time and under budget Reindeer/Devil Creek: on time and budget Wortel: on budget, 30 days behind schedule 2-train GLNG project sanctioned Fletcher Finucane sanctioned (January 2012) Zola gas discovery Finucane South oil discovery Acquisition of Eastern Star Gas Ltd Divestment of Evans Shoal Asset swap in Amadeus Basin US$1.2 billion in Export Credit Agency facilities $7.5 billion of funding capacity 8 4

6 Underlying net profit up 20% 2011 Full-year result Change on 2010 Production 47.2 mmboe (5%) Sales revenue $2,530 million 14% EBITDAX $2,126 million 27% Net profit after tax $753 million 51% Underlying net profit $453 million 20% Operating cash flow $1,253 million (2%) Final dividend 15 cents per share No change 9 $7.5 billion of funding capacity Balance sheet capacity to fund execution of business strategy and minimise financing risk Available liquidity Debt maturity profile $billion $million Cash 1.9 Undrawn corporate lines 1.1 Undrawn project line (PNG LNG) Charts as at 31 December ECA facilities 1,800 1,600 1,400 1,200 1, Beyond 2020 Drawn facilities Euro subordinated notes ECA Undrawn bank facilities The Euro subordinated notes mature in Santos has the option to redeem the notes in

7 Capex & production guidance 2012 capex $3.75 billion and production mmboe $billion 4 Capex 3.75 mmboe 60 Production Actual 2012 Forecast GLNG PNG LNG EA WA&NT Asia Exploration Actual 2012 Forecast Range 2012 capital expenditure guidance: $1.9 billion GLNG $0.6 billion PNG LNG $0.6 billion Eastern Australia $0.2 billion Western Australia & Northern Territory $0.2 billion Asia $0.25 billion exploration 11 Capital expenditure guidance excludes capitalised interest 2012 production influenced by: Production from new projects (Chim Sáo, Reindeer, Spar, Wortel) and higher Cooper production DLNG 35-day planned shutdown Delayed take-up of Reindeer gas by customer Higher gas price at Maleo reduces PSC production entitlement combined with planned shutdown Devil Creek gas plant, Western Australia Leading Australian domestic producer 12 6

8 Strong demand for Australian gas Demand set to quadruple by 2025; gas prices will trend towards oil-linked international parity PJ 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, LNG exports Domestic gas demand 13 Source: Santos and Wood Mackenzie Significant resource base in EA Santos has 10,900 PJ of gas reserves and resources in Eastern Australia, excluding GLNG, and the infrastructure required to accelerate production 2P sales gas 2P 2C reserves 1 Cooper 1,130 3,598 NSW CSG 1,141 2,768 Otway/Gippsland Surat/Bowen ,183 Amadeus Total 2,974 7,928 Amadeus Cooper Existing pipeline Santos assets Surat/Bowen Gunnedah 1. All Santos share. Reserve and resource numbers are in PJ (as at 31 December 2011) and include ethane. 2. Excludes Santos reserves and resources held within GLNG project. 3. Post completion of the Mereenie acquisition and sell-down of Palm Valley/Dingo Otway Gippsland 14 7

9 Cooper infill: 6-well pad underway Undrilled slots 6 well slots prior to rig mobilisation 15 Leading the way on unconventional exploration Targeting production and ~5,000 PJ resource by 2015 Prove gas content and recoverable volumes Achieve gas flow to surface Demonstrate commercial flows 2P reserve bookings Acquired the resource understanding Australia s first shale fracture and coring program in 2006 Australia s first independently certified shale and unconventional resource bookings achieved in 2008 Vertical well technology trials and optimisation Acquiring further data to enable appraisal optimisation Dedicated shale well including dedicated shale fracturing Horizontal well technology trials and optimisation Dedicated shale horizontal drilling trial Extensive fracturing trials beyond levels currently tested in the Cooper Evaluation across broader Santos Cooper acreage Multiple horizontal and vertical appraisal wells Targeting initial shale reserve bookings in 2013, and production in C * 2,345 PJ 2C * 2,600 PJ 2C * 4,000 PJ 2C * 4,800 PJ Outlook Outlook Outlook 16 * Santos share total shale and other unconventional resources 8

10 Cooper unconventional Unconventional resource gas plays to be explored in Moomba 191 shale gas well Dedicated vertical shale gas well drilled in December 2011 with cores taken from each of three shale intervals Microseismic monitored fracture stimulation in Q Moomba North shale well Well design in progress for drilling in Q First horizontal well, feet lateral length with multiple stages Other unconventional gas resources Drilling four wells in 2H 2012 Applying contemporary technology, targeting basin centred gas sands and other unconventional horizons including deep coal * Roseneath, Epsilon and Murteree shale zones Developed conventional Gross gas thickness ~1600 feet Moomba field REM * shale Tight sands and mixed lithology Deep coal NSW CSG Gunnedah Basin coals are world-class, with appraisal program confirming confidence and known resources in excess of 12,000 PJ NSW CSG industry $1.5 billion already invested Over 1,000 potential new jobs Significant local gas production for the first time A low-carbon alternative to traditional dependence on coal 2P reserves Contingent resources (2C) 1,141 PJ Santos net 2,768 PJ Santos net 18 9

11 High-impact WA campaign in 2012 Exciting drilling campaign, including three offshore Santosoperated rigs Browse Basin gas Exploration - Crown Carnarvon Basin gas Appraisal Zola, Hurricane Exploration Winchester, Beam Carnarvon Basin oil 3 development wells for Fletcher Finucane 5 appraisal & development wells for Stag Exploration - Hoss, Clark Zola Carnarvon Hoss Basin Winchester Beam Legend Santos acreage Northern Oil field Territory Gas field Oil pipeline Gas pipeline Stag Dampier Devil Creek Western Australia Indian Ocean Fletcher Finucane Hurricane Clark Browse Basin Territory of Ashmore & Cartier Islands Crown 19 Carnarvon Basin: two domestic gas hubs Project delivery in 2011 on budget and on schedule Spar first gas in June 2011 Winchester Hurricane 20 Reindeer first gas in December 2011; with 4 quality off-take contracts in place Appraisal drilling planned in 2012 Zola gas discovery - Multiple development options; LNG and domestic - >100m of net gas pay in excellent quality reservoir Hurricane gas discovery Two exploration wells planned for 2012 Beam - Potential tie-back to Varanus Island hub Winchester - Geological setting similar to Zola discovery - Santos operated and 75% equity Zola Spar East Spar Legend Santos acreage Oil field Gas field Oil pipeline Gas pipeline Beam Varanus Island Reindeer Dampier Devil Creek Western Australia 10

12 Carnarvon Basin oil: Fletcher Finucane Sanctioned 8 months after discovery, an industry-leading transition from exploration to development $490 million gross oil project in the Carnarvon Basin, sanctioned in January 2012 Santos is operator with a 48% effective interest Three-well sub sea tie back to existing Santos operated facility at Mutineer-Exeter Estimated average gross production rate of 15,000 barrels per day for first year Approximately 14 million barrels of gross 2P reserves Pipeline route survey, Fletcher Finucane 21 Browse Basin: Crown well in 2H 2012 Excellent street address Surrounded by the Browse, Ichthys and Prelude LNG Projects Acreage is all Santos operated Liquids rich prospects; materiality could provide stand-alone development options Crown well drilling planned for 2H 2012 Rig secured Santos operator with 30% equity interest Numerous other prospects Processing 3D seismic on Burnside discovery Burnside appraisal well scheduled for 2013 Brecknock Calliance Poseidon Torosa Legend Santos acreage Oil field Gas field Prospect WA-274-P WA-410-P Crown WA-411-P Argus Western Australia Territory of Ashmore & Cartier Islands WA-274-P Burnside WA-281-P Ichthys Echuca Shoals 22 11

13 Material Bonaparte Basin position A critical region for Santos now and into the future Darwin LNG Continued strong production 35-day planned shutdown in 2012 Evans Shoal Sold to Eni for up to US$350 million in December 2011 Caldita Barossa An increasingly strategic asset WA 10-1 New exploration permit JPDA Bayu-Undan WA 10-1 Santos 100% (operated) Joint Petroleum Development Area Western Australia Legend Santos acreage Oil field Gas field Gas pipeline Evans Shoal Sold to Eni Indian Ocean Darwin LNG Santos 11.5% WA-6-R NT/RL1 Petrel WA-27-R WA-18-P Tern Frigate Joseph Bonaparte Gulf Wyndham Caldita Barossa Santos 40% NT/P69 Barossa NT/P61 Caldita Darwin Wickham Point Bonaparte LNG Santos 40% Northern Territory 23 GLNG plant site image, Curtis Island, Australia. First LNG is expected in Growth in LNG 24 12

14 Santos unique LNG Portfolio Darwin (Santos 11.5%) Conventional gas supply PNG (Santos 13.5%) First gas exports from PNG GLNG (Santos 30%) CSG-to-LNG Bonaparte (Santos 40%) Floating LNG 25 Santos LNG customers and partners PNG LNG Bonaparte LNG Darwin LNG GLNG 26 13

15 Asian LNG pricing Three distinct gas pricing structures for long-term LNG contracts; Asia to remain an oil-linked market Gas-on-gas market Oil-linked market Henry Hub NBP Oil Product JCC-linked Henry Hub 27 GLNG: strong progress since FID First LNG expected in 2015 on schedule from US$16 billion two-train project Strong team Upstream Water management World-class contractors executing with experienced project partnership team Over 400 wells drilled and more than 500 landholder agreements Fluor mobilising to the field 1Q 2012 Transparent water management with beneficial use for regional communities 28 Gas transmission pipeline Plant and port Production of line-pipe commenced, over 200km already manufactured Saipem mobilising 1H 2012 Clearing of LNG plant site complete, first concrete poured for Train-1 compressor foundations Bulk earthworks more than 60% complete 14

16 Upstream More than 400 wells drilled to date, with >200 wells commissioned with capacity of 240 TJ/d 29 Santos operates on grazing land, not cropping land More than 500 agreements in place with 200 landowners 34,000 hectares of land owned to be used for key development activities and environmental offsets Field production is optimised Producing to domestic nomination Remaining gas is injected into storage Roma underground gas storage Ramp gas management tool Injection commenced and ramping up Fairview Area Roma Area Arcadia Area Scotia Area Producing, not reducing, water Queensland-first partnership between a CSG company and a private landholder Treated CSG water is an opportunity for landholders Mount Hope Station irrigation project Santos providing up to 700 ML of treated water Further projects to be rolled out Planning Roma aquifer re-charge Inject 10 ML of treated water per day Will provide Roma with about 50 years of extra water supply Launched Santos GLNG water portal Includes detailed results from more than 100 water monitoring locations

17 GLNG plant site, Curtis Island 31 1 February 2012 GLNG material offloading facility, Curtis Island 32 1 February

18 PNG LNG project 33 On track for start-up in mtpa, US$15.7 billion two-train development, operated by ExxonMobil Santos 13.5% equity Project progressing well, recent milestones include: Commenced piling work at Hides Gas Conditioning Plant Significant earthworks progress at Komo and first foundation installed for the terminal building 100km onshore pipeline and 130km of offshore pipeline completed LNG tank foundation complete and construction underway on outer LNG tank shells Hides drilling program to commence in 2012, with well targeting the gas/water contact early in sequence. Hides and Angore development drilling will provide better understanding of expansion potential LNG tank construction Hides gas conditioning plant PNG LNG plant construction 34 17

19 Bonaparte LNG on schedule BLNG building momentum; >2Tcf resource Santos 40% equity and carried to FID (GDF SUEZ 60% and operator) 150 people working on the project Substantial progress on pre-feed: Granherne (upstream) and DORIS Engineering (downstream) Project remains on schedule: - FEED FID First LNG 2018 FID timing well positioned in Santos LNG portfolio Successful Petrel-7 appraisal programme in 2011; prolonged testing to assist with design Petrel-7 appraisal program, Stena Clyde 35 Chim Sao FPSO, Vietnam. First oil was produced in October 2011, on schedule and under budget. Focused growth in Asia 36 18

20 Focused Asian portfolio Asia will contribute 20% of Santos production in 2012 Asia s growing energy needs are driving higher domestic gas prices Established Indonesian business with strong track record of project delivery Chim Sáo project in Vietnam delivered on time and on budget and producing ~25,000 bbl/day Focused exploration portfolio, with significant drilling program planned over next 18 months New Singapore office will consolidate presence in Asia and identify new opportunities Oyong wellhead platform, Indonesia Indonesia established business Strong base business in East Java with increased margins and incremental growth Increased margins from rising domestic gas prices New gas volumes sold at US$5-6 per MMBTU with escalation New Maleo gas price agreed Continued strong production - Oyong gross production 2,400 bbl/d (oil) and 60 MMscf/d (gas) - Madura gross gas production 110 MMscf/d Wortel project delivered in January 2012 on budget - Oyong/Wortel combined gross production 90 MMscf/d Peluang FID in late BCF tie-back to Maleo with start-up expected 2H 2013 Surabaya Wortel Grati Processing Plant 50km Legend Santos acreage Oil field Gas field Oil pipeline Gas pipeline Oyong Madura Island Sampang Madura Peluang PSC Offshore PSC East Java Maleo Bali 19

21 39 Indonesia South Sumatra CSG Santos farm-in to two CSG licences in South Sumatra Leverages Santos CSG experience in Australia and operating experience in Indonesia Farm-in agreement with Sugico gives Santos 60% equity and operatorship Up to 60 metres of coal thickness identified in the west of the licences Licences are located close to pipelines connected to undersupplied West Java gas market Up to 12-well drilling program to start in 2012 Opportunity exists for Santos to access further acreage Perabumulih OIG 7,8,9,10 OIG 2 OIG 5 OIG 1 EOM 2 OIG 4 EOM 1 Ogan Komering I PSC OIG 3 SSWJ pipeline OIG 6 Legend Santos acreage Oil field Gas field Oil pipeline Gas pipeline drilling campaign Ogan Komering II PSC Sumatra Vietnam New oil production with upside unfolding Chim Sáo online in October 2011, production 25,000 bbl/day Chim Sáo NW to be drilled in Q Explore upside potential of Chim Sáo Potential for significant resource additions Dua development area Discovered oil resource Development concept being worked Block 123, Phu Khanh Basin 3D seismic planned for 2012 Block 13/03, Nam Con Son Basin PSC awarded in December 2011 Chim Sáo north-west oil discovery Legend Santos acreage Oil field Gas field Oil pipeline Gas pipeline Chim Sáo oilfield Chim Sáo production platform Chim Sáo development area Laos Thailand Cambodia Dua oilfield Dua development area 5km China Vietnam Chim Sáo, Dua 40 20

22 Bay of Bengal Exploration-driven opportunity to meet growing gas markets in Bangladesh and India Bangladesh Chittagong market significantly under-supplied Sangu-11 well penetrated a new gas reservoir with approximately 20 metres of good quality gas pay The well will be tied-in to the existing Sangu facilities India Bangladesh Block 16 Bay of Bengal India Sangu Burma 41 India Targeting material gas prospectivity for domestic market Licences currently in force majeure due to border dispute Legend Santos acreage Oil field Gas field Oil pipeline Gas pipeline Reference slides March

23 2012 guidance Item 2011 Actual 2012 Guidance Production (mmboe) Production costs ($m) DD&A expense ($/boe) Royalty related taxation expense 1 ($m after tax) Capital expenditure (including exploration & evaluation) $3 billion $3.75 billion 1 Royalty related taxation expense guidance for 2012 assumes an oil price of A$100 per barrel. 43 Production impacted by GLNG sell down mmboe Production guidance 2011 production impacted by 15% sell-down of GLNG (1.9 mmboe), flooding in Cooper Basin and cyclones offshore Western Australia 2012 guidance unchanged at mmboe, driven by new projects on-line (Reindeer/Devil Creek, Spar, Chim Sáo and Wortel) 44 22

24 Sales revenue increased by 14% $m Sales revenue 3,000 2,500 2,489 2,762 2,181 2,228 2,530 2,000 1,500 1, Oil Sales gas, ethane and LNG Condensate and LPG Higher realised prices for all products; oil price up 32% and gas price up 9% Third party products revenue of $297 million 45 Production costs increased by 4% $m Cash production costs 700 $m guidance 2011 costs higher due to flood recovery in the Cooper Basin and commencement of production from Chim Sáo Higher costs in 2012 with full year contribution from new projects 46 23

25 Business unit EBITDAX $m Business unit EBITDAX 1, Eastern Australia WA&NT Asia Pacific GLNG (2) Corporate and other Corporate and other in 2011 includes gains on sale of 15% of GLNG and Evans Shoal 47 Net profit increased by 51% Net and underlying profit after tax $m 1,650 1, NPAT Underlying Profit Underlying profit of $453 million increased by 20%, with higher commodity prices offset by lower production and a higher effective tax rate 48 24

26 Net profit reconciliation $m 1, (43) (40) 2010 Prices & Sales Effective foreign volumes tax rate exchange Net profit after tax (43) (40) (16) (40) (29) (66) 753 (16) (40) Prod n costs DD&A (29) E&E 56 Net finance costs 216 (66) Gain on sale & impairment Other Significant items after tax $m Net profit after tax Less: Significant items: Net gains on sales Net impairment Bangladesh (79) - Kipper (12) - Cooper Basin (5) (58) Kyrgyz Republic - (24) Other (6) (41) Net impairment loss (sub-total) (102) (123) Other (6) 33 Significant items (sub-total) Underlying net profit

27 Operating cash flow remains strong $m Operating cash flow 1,500 1,385 1,200 1,214 $m 1,155 1,273 1, Consistent cash flow generation from the base business 51 Capital expenditure $m Capital expenditure 4,000 3,500 3,000 2,500 3,069 3,750 2,000 1,500 1,305 1,628 1,557 1,882 1, guidance GLNG Asia (incl PNG LNG) EA WA&NT Exploration Total Reindeer/Devil Creek, Spar and Chim Sáo on-line during 2011, Wortel in January guidance unchanged at $3.75 billion; GLNG and PNG LNG on track 52 26

28 2012 exploration schedule 53 Well Name Basin / Area Target Santos Interest % Timing Tardrum Bowen CSG 50 Successful Beam-1 Carnarvon Gas 45 Q1 Hoss-1 Carnarvon Oil 37.3 Q2 Indonesia CSG South Sumatra CSG 60 Q2/Q3 Chim Sáo NW-1 Nam Con Son Oil Q3 Crown-1 Browse Gas 30 Q3 Van Der Waals 1 Cooper Gas 66.6 Q3 Central Asia* Fergana Oil/Gas 100 Q3/Q4 Denison CSG Bowen CSG 50 Q4 Gaschnitz 1 Cooper Gas 66.6 Q4 Langmuir 1 Cooper Gas 66.6 Q4 Winchester-1 Carnarvon Gas 75 Q4 Moomba Deep Exploration Cooper Gas 66.6 Q4 Moomba North Shale Cooper Gas 66.6 Q4 Gunnedah CSG Gunnedah CSG Various 2012 The exploration portfolio is continuously being optimised therefore the above program may vary as a result of rig availability, drilling outcomes and maturation of new prospects * Conditional on final PSC approvals Contact information Head office Adelaide Ground Floor, Santos Centre 60 Flinders Street Adelaide, South Australia 5000 GPO Box 2455 Adelaide, South Australia 5001 Telephone: Facsimile: Useful contacts Share register enquiries: web.queries@computershare.com.au Investor enquiries: investor.relations@santos.com Andrew Nairn Group Executive Investor Relations Level 10, Santos Centre Direct: andrew.nairn@santos.com Nicole Walker Investor Relations Manager Level 10, Santos Centre Direct: nicole.walker@santos.com Website: