2007 full year results - santos...1. 2007 full year results john ellice-flint - chief executive...
TRANSCRIPT
1.
2007 Full Year Results2007 Full Year ResultsJohn ElliceJohn Ellice--Flint Flint -- Chief Executive OfficerChief Executive Officer
Peter Wasow Peter Wasow -- Chief Financial OfficerChief Financial Officer
21 February 200821 February 2008
2.
Disclaimer & Important NoticeDisclaimer & Important Notice
This presentation contains forward looking statements that are sThis presentation contains forward looking statements that are subject to ubject to risk factors associated with the oil and gas industry. It is belrisk factors associated with the oil and gas industry. It is believed that the ieved that the expectations reflected in these statements are reasonable, but texpectations reflected in these statements are reasonable, but they may hey may be affected by a range of variables which could cause actual resbe affected by a range of variables which could cause actual results or ults or trends to differ materially, including but not limited to: pricetrends to differ materially, including but not limited to: price fluctuations, fluctuations, actual demand, currency fluctuations, geotechnical factors, drilactual demand, currency fluctuations, geotechnical factors, drilling and ling and production results, gas commercialisation, development progress,production results, gas commercialisation, development progress,operating results, engineering estimates, reserve estimates, losoperating results, engineering estimates, reserve estimates, loss of market, s of market, industry competition, environmental risks, physical risks, legisindustry competition, environmental risks, physical risks, legislative, fiscal lative, fiscal and regulatory developments, economic and financial markets condand regulatory developments, economic and financial markets conditions in itions in various countries, approvals and cost estimates.various countries, approvals and cost estimates.
All references to dollars, cents or $ in this document are to AuAll references to dollars, cents or $ in this document are to Australian stralian currency, unless otherwise stated.currency, unless otherwise stated.
3.
Webcast AgendaWebcast Agenda
Result highlights, summary and outlookResult highlights, summary and outlook
2007 performance2007 performance
Key strategic value driversKey strategic value drivers
Eastern Australian gasEastern Australian gas
LNGLNG
Delivering the strategyDelivering the strategy
ConclusionConclusion
John ElliceJohn Ellice--FlintFlintCEO & Managing DirectorCEO & Managing Director
4.
Transforming Santos: a Leader in Asian EnergyTransforming Santos: a Leader in Asian Energy
A leader in A leader in AustraliaAustralia
Legacy assets in Legacy assets in exploitation phase, exploitation phase,
price growthprice growth Emerging Emerging Player in LNGPlayer in LNG
Series of growth Series of growth assets for globally assets for globally
priced gaspriced gas Building Asian PositionBuilding Asian Position
Extending franchiseExtending franchise
5.
Result highlightsResult highlights
ProductionProduction 59.1 mmboe59.1 mmboe (3%)(3%)
Sales RevenueSales Revenue $2,489 million$2,489 million (10%) (10%)
EBITDAX EBITDAX $1,733 million $1,733 million (19%)(19%)
NPAT NPAT $441 million$441 million (32%)(32%)
Operating Cash FlowOperating Cash Flow $1,214 million$1,214 million (22%)(22%)
Full Year DividendFull Year Dividend 40 cps40 cps UnchangedUnchanged
2P Reserve Replacement Ratio2P Reserve Replacement Ratio 178%178%
Total shareholder returnTotal shareholder return 48% 48%
2007 Full Year Result2007 Full Year ResultChangeChange
6.
Summary: At the Inflection PointSummary: At the Inflection Point
Gladstone LNG transforms Santos:Gladstone LNG transforms Santos:
Strategy causes a shift from domestic to global pricing
Santos has a leadership position in East Australian Gas
Santos has a leadership position in Coal Seam Gas
And is therefore positioned for a step change in the value of the large scale resources in these areas
7.
OutlookOutlook
Strong reserves growth from existing discoveries
• Contingent resources commercialized
Creating significant investment opportunities
• Delineation, development and LNG facilities
Project milestones provide catalysts in ‘08 and ‘09
• Significant value growth will be flagged by milestone achievement
2008 production outlook 56-58 mmboe
• Return to growth in 2009
8.
Result highlights, summary and outlookResult highlights, summary and outlook
2007 performance2007 performance
Key strategic value driversKey strategic value drivers
Eastern Australian gasEastern Australian gas
LNGLNG
Delivering the strategyDelivering the strategy
ConclusionConclusion
Webcast AgendaWebcast Agenda Peter WasowPeter WasowChief Financial OfficerChief Financial Officer
9.
Net Profit After TaxNet Profit After Tax
(A$ million)(A$ million)
2007 NPAT
2006 NPAT
643 (18)(138)
40 441
Significant ItemsNet
Volume & Mix
E&E Expensed
200
300
400
500
600
700
800
(16)
Operating Costs
27
Liquids Prices in A$
42
Gas Prices
(53)
PRRT/APT
Ded’ns
(3)
Other
(83)
DD&A
Note: P&L movements allocated between price and volume driven eNote: P&L movements allocated between price and volume driven effects and cost increasesffects and cost increases
10.
ProductionProduction
30
35
40
45
50
55
60
65
2007
61.0 (4.8)
2006
(0.7)
Mutineer Exeter issues
4.2
New volumes
Natural decline
59.1(0.6)
Bayu net entitlement
change
(mmboe)(mmboe)
11.
10
15
20
25
30
35
40
(1.50)32.80 (0.49)0.69
A$ Liquids Prices
Gas Prices
30.80
Controllable Items
1.24
CostsPRRT/APT
20072006
Volumes & Mix
(1.53) (0.41)
Moonie toBrisbanePipeline
Remediation
Netback (A$/boe) Netback (A$/boe) Cash margin per boe soldCash margin per boe sold
MarginsMargins
12.
EBITDAXEBITDAX
(A$ million)(A$ million)
2,144
1,733
Significant ItemsNet Volume
& Mix1,600
1,800
2,000
2,200
2,400
Operating Costs
Liquids Prices in A$
Gas Prices
PRRT/APT
Ded’ns
(106) (283)
(26)
4063
(81)(18)
Other
20072006
1,400
1,200
1,000
13.
(A$ million)(A$ million)
200
300
400
500
600
700
800
900
692
2006$11.35/boe
Infrastructure assets
(87)
Reserves Revisions
Other
(36) 759
20072007$12.84/boe$12.84/boe
Future Costs
(16)
2646
Lower Volume
Higher industry costs driving up DD&AHigher industry costs driving up DD&A
DD&A DD&A
2008 forecast: ~$12.30/boe2008 forecast: ~$12.30/boe
14.
Capital InvestmentCapital Investment
(A$ million)(A$ million)
0
200
400
600
800
1,000
1,200
1,400
1,600
2007 2008F
OtherExploration IndonesiaOyong Phase 2Chim Sao (Vietnam)ReindeerWA OilJKN-MBA pipelineCooper OilHenryCooper & EQ Gas DLNG2Bayu UndanPNGFairview GLNG
LNGLNG
EA GasEA Gas
Cooper OilCooper Oil
WAWA
AsiaAsia
ExplorationExploration
15.
2007 results below expectations, 2008 program at reduced pace2007 results below expectations, 2008 program at reduced pace
Cooper Basin OilCooper Basin Oil
2007 actual• 132 wells, 73% success• 2P reserves added 8 mmbbl• Capex $306m• Production rate ~ 9,100 bopd net to Santos• Full cycle F&D cost ~ A$45/bbl
2008 outlook• 94 wells, capex $260m• Production rate ~ 12 – 14,000 bopd net• Full cycle F&D cost consistent with 2007• Scaleable program
16.
Reserves Grow Strongly, at Low CostReserves Grow Strongly, at Low Cost
0
200
400
600
800
1,000
2004 2005 2006 2007
mm
boe
2P Reserves2P Reserves
1P1P
2P2P
Reserve Replacement CostReserve Replacement Cost
0
5
10
15
20
2004 2005 2006 2007
A$/b
oe
234%234%178%178%3 yr 3 yr aveave replacement ratereplacement rate
178%178%175%175%2007 replacement rate2007 replacement rate
2P2P1P1P
17.
Contingent Resources GrowContingent Resources Grow
2.6 2.6 bnbn boe (14.5 tcf) of contingent resource: 22% 3yr CAGRboe (14.5 tcf) of contingent resource: 22% 3yr CAGR
•• PNG LNGPNG LNG•• Darwin LNG2Darwin LNG2
LNG 7.3 tcfeLNG LNG 7.3 tcfe
100% exposed to global pricing100% exposed to global pricing100% exposed to global pricing
•• FairviewFairview•• RomaRoma
CSG 5.5 tcfCSG 5.5 tcf
•• CooperCooper•• OtwayOtway
East Aust Gas 0.7 tcfeEast Aust Gas 0.7 tcfe
•• Asia: oil & gasAsia: oil & gas•• WA: oil & gasWA: oil & gas
Other 160 mmboeOther 160 mmboe
18.
Creating Strong LeverageCreating Strong Leverage
0
500
1,000
1,500
2,000
2,500
3,000
2008 2009 2010 2011 2012 2013 2014 2015
2P
Res
erve
s (m
mb
oe)
Reserves grow ~ 300% at low cost1
Reserves grow ~ 300% at low cost1
Exposure to global prices grows from less
than 60% to 100%
Exposure to global prices grows from less
than 60% to 100%
01234567
2008 2009 2010 2011 2012 2013 2014 2015
A$
Rev
enu
e ($
bn
)
Leverage to revenues: >200% growth2
Leverage to revenues: >200% growth2
To domestic marketsTo domestic marketsTo global marketsTo global markets
1Reserve bookings from existing mean contingent resources only2 At a flat nominal WTI oil price of US$70 and a constant LNG beta of 11.5
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015
Pro
duct
ion
(m
mb
oe)
Production grows by ~ 70%Production grows by ~ 70%Production grows by ~ 70%
To domestic marketsTo domestic marketsTo global marketsTo global markets
19.
Webcast AgendaWebcast Agenda John ElliceJohn Ellice--FlintFlintCEO & Managing DirectorCEO & Managing Director
Result highlights, summary and outlookResult highlights, summary and outlook
2007 performance2007 performance
Key strategic value driversKey strategic value drivers
Eastern Australian gasEastern Australian gas
LNGLNG
Delivering the strategyDelivering the strategy
ConclusionConclusion
20.
SantosSantos’’ Five Business AreasFive Business Areas
AsianAsianGrowthGrowth
LNGLNG
Western AustraliaWestern AustraliaOil & GasOil & Gas EastEast
AustralianAustralianGasGas
Cooper Basin Cooper Basin OilOil
Inflection point in Inflection point in
East Australian gas East Australian gas
and LNG values is and LNG values is
the focus of this the focus of this
presentationpresentation
Legend
Exploration Production
Legend
Exploration Production
21.
GLNG Creates Value Inflection PointGLNG Creates Value Inflection Point
CooperEast QldOtway
Gippsland
CooperEast QldOtway
Gippsland
Darwin LNG1PNG LNG
Darwin LNG2BrowseKutei
Darwin LNG1PNG LNG
Darwin LNG2BrowseKutei
LNG linked LNG linked pricingpricing
300% 300% reserves reserves growthgrowth
Gladstone LNG frees Gladstone LNG frees SantosSantos’’ large gas resources large gas resources
from East Coast volume from East Coast volume and price constraintsand price constraints
CSGto
LNG
CSGto
LNG
LNGLNGEast Australian GasEast Australian Gas
22.
*Source:
Carnarvon and Browse Basin: Wood Mackenzie
CSG: ABARE: Australian Gas Supply Demand Balance to 2019-20
Coal Seam Gas: A Game Changing Resource PlayCoal Seam Gas: A Game Changing Resource Play
3P113+ tcf*
3P113+ tcf*
3P61+ tcf*
3P61+ tcf*
CSGCSGResourceResourcePotentialPotential250+ tcf*250+ tcf*
23.
Energy Market DifferentialsEnergy Market Differentials
Prices available in domestic and export marketsPrices available in domestic and export markets
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07
$A/G
J
(1) Source: Argus Monthly LNG (average of Japan, Taiwan & South Korea ex-ship spot and contract prices)
(2) Netback determination uses Santos assumed range of costs for shipping and liquefaction
Santos average realised gas price
Domestic Australiannetback range (2)
Average Asian Average Asian LNG Price LNG Price (1)(1)
24.
100 km100 km
BrisbaneBrisbane
GladstoneGladstone
LegendSantos Acreage
Oil Pipeline
Gas Pipeline
LegendSantos Acreage
Oil Pipeline
Gas Pipeline
Queensland
New SouthWales
SuratBasin
BowenBasin
GunnedahBasin
NewcastleNewcastle
SantosSantos’’ Leading CSG Acreage PositionLeading CSG Acreage Position
Greater ScotiaGreater Scotia
•• 0.5 million acres (net)0.5 million acres (net)
•• 27 TJ/d production 27 TJ/d production
•• Production since 2002Production since 2002
GunnedahGunnedah
•• 4.8 million acres (gross)4.8 million acres (gross)
•• 20 core holes in 20 core holes in 18 months18 months
•• Leverage to NSW Leverage to NSW markets or potential markets or potential longer term LNGlonger term LNG
Greater RomaGreater Roma•• 1.4 million acres (net)1.4 million acres (net)
•• High quality resourceHigh quality resource
•• Active pilot programActive pilot program
Greater FairviewGreater Fairview•• 0.8 million acres (net)0.8 million acres (net)
•• 70 TJ/d production70 TJ/d production
•• Wells up to 10 TJ/dWells up to 10 TJ/d
DenisonDenison•• 0.8 million acres (net)0.8 million acres (net)
•• Exploration stageExploration stage
•• Same coals as FairviewSame coals as Fairview
Santos hasSantos hascaptured 50captured 50--7070tcf of potentialtcf of potential
resourceresource
25.
Santos: a Leader in Coal Seam GasSantos: a Leader in Coal Seam Gas
0
5
10
15
20
25
2006 2007 2009 2013
tcf
forecastforecastactualactual
0
5
10
15
20
25
30
35
40
45
50
55
Fairv
iew
Moran
bah
Sprin
g Gull
y
Berw
ynda
le St
hSc
otia
Dawso
nPe
at
Koga
n Nor
th
Tipton
Wes
t
Daand
ine
Dawso
n Va
lley
Argy
le
Pro
du
ctio
ion
(m
mcf
/da
y)
Santos CSG reserves Santos CSG reserves growth growth
Santos operates 2 of top 5 fields Santos operates 2 of top 5 fields
3P reserves3P reserves
High side contingent resourceHigh side contingent resource
Coal Seam Gas ProductionCoal Seam Gas Production
Source: Energy Quest, November 2007
26.
Santos: Leader in East Australian GasSantos: Leader in East Australian Gas
BrisbaneBrisbane
SydneySydney
CanberraCanberra
MelbourneMelbourne
GladstoneGladstone
Mt IsaMt Isa
AdelaideAdelaide
Pt BonythonPt Bonython
FairviewFairview
RomaRoma WallumbillaWallumbillaBalleraBallera
MoombaMoomba
CasinoCasino LongfordLongford
LongtomLongtomKipperKipper
Denison Denison TroughTrough
ScotiaScotia
0
0.5
1
1.5
2
2.5
3
2P Mean contingentresource (2C)
tcf
Santos NonSantos Non--CSG East CSG East Australian gas reserves Australian gas reserves
and resources and resources
• Post 2010, 92% of existing contracted volumes are subject to price review
• All new contracts are either short-term or subject to price review
27.
Implications for Value of SantosImplications for Value of Santos
Eastern Australia gas value
0
2
4
6
8
10
12
14
2008 2009 2010 2011 2012 2013 2014 2015 2016
Consensus High Low
$A/G
J
Broker LNG Broker LNG price forecasts, price forecasts, netted back to netted back to plant inlet valueplant inlet value11
Broker EA gas Broker EA gas price forecastsprice forecasts
11 Broker oil price forecasts converted to landed LNG price by appBroker oil price forecasts converted to landed LNG price by application of recent contract prices reported by Poten lication of recent contract prices reported by Poten Partners, with highest and lowest estimates omitted, and SantosPartners, with highest and lowest estimates omitted, and Santos’’ estimates of shipping and liquefaction costsestimates of shipping and liquefaction costs
28.
Gladstone LNG: Transforming SantosGladstone LNG: Transforming Santos
•• GLNG exposes SantosGLNG exposes Santos’’large scale gas resources large scale gas resources to international markets:to international markets:
-- Access LNG pricingAccess LNG pricing
-- Access LNG market volumes Access LNG market volumes
-- Access higher ratesAccess higher rates
•• CSG resources:CSG resources:
-- Large position, captured Large position, captured earlyearly
-- Low development cost Low development cost
100 km
BrisbaneBrisbane
GladstoneGladstone
Queensland
SuratBasin
BowenBasin
RomaRoma
FairviewFairview
29.
Gladstone LNG: Progress & Milestones Gladstone LNG: Progress & Milestones
ProgressProgress•• Freehold land acquired (up to 10 mtpa)Freehold land acquired (up to 10 mtpa)
•• Queensland significant project status Queensland significant project status
•• PrePre--FEED marine studies completeFEED marine studies complete
•• Environmental applications lodgedEnvironmental applications lodged
•• Strong interest from potential partners: Strong interest from potential partners: evaluation underwayevaluation underway
•• Strong interest from potential offStrong interest from potential off--takerstakers
•• Strong interest from EPC contractorsStrong interest from EPC contractors
•• Rig alliance for 3 newRig alliance for 3 new--build rigs, build rigs, 6 running in total6 running in total
MilestonesMilestones•• PrePre--FEED contracts to be awarded Q1 2008FEED contracts to be awarded Q1 2008
•• Enter FEED by end 2008Enter FEED by end 2008
•• FID by end 2009FID by end 2009
•• First LNG by end 2013/early 2014First LNG by end 2013/early 2014
Coal ExportCoal Export
30.
PNG LNG Takes ShapePNG LNG Takes Shape
•• Pre FEED work on 6.3 mtpa plant Pre FEED work on 6.3 mtpa plant completedcompleted
•• Material ramp up of project team Material ramp up of project team and expenditureand expenditure
•• Joint venture alignment and key Joint venture alignment and key commercial terms near completecommercial terms near complete
•• Marketing ready to commenceMarketing ready to commence
•• Strong PNG Government supportStrong PNG Government support-- close out of fiscal terms being the close out of fiscal terms being the
outstanding step before FEEDoutstanding step before FEED
The PNG LNG Project has built significant momentumThe PNG LNG Project has built significant momentum……
Hides & Angore
Gobe
Kutubu & Agogo
Juha
Port Moresby
LegendGas processing facilityGas pipelineCondensate pipeline
LegendGas processing facilityGas pipelineCondensate pipeline
LNG Plant
……and is poised to enter FEEDand is poised to enter FEED
31.
Webcast AgendaWebcast Agenda John ElliceJohn Ellice--FlintFlintCEO & Managing DirectorCEO & Managing Director
Result highlights, summary and outlookResult highlights, summary and outlook
2007 performance2007 performance
Key strategic value driversKey strategic value drivers
Eastern Australian gasEastern Australian gas
LNGLNG
Delivering the strategyDelivering the strategy
ConclusionConclusion
32.
Catalysts for 2008/09Catalysts for 2008/09
2008 2009 2010 2011 2012 2013 2014
Chim Sao(Blackbird Dua – Vietnam)
A$500m A$500m –– A$1bnA$1bnFEED Q1, FID 2H FEED Q1, FID 2H ‘‘08 Start Up08 Start Up
Cooper Oil(Onshore oil programme)
Drilling Inventory BuildDrilling Inventory Build
GLNG>A$1bn>A$1bn
PNG LNG FEED Q1 FEED Q1 ‘‘08 FID 2H 08 FID 2H ‘‘0909 Start UpStart Up
FEED Q4 FEED Q4 ‘‘08 FID Q4 08 FID Q4 ‘‘0909 Start UpStart Up
Partner selection and Reserves build confirmed by YE08
<A$500m<A$500m
Reindeer(WA Domestic Gas)
FID Q1 FID Q1 ‘‘0808 Start UpStart Up
Kipper(Victoria Domestic Gas)
FID Q4 FID Q4 ‘‘0707 Start UpStart Up
Oyong PhII(Indonesia Domestic Gas)
FID Q4 FID Q4 ‘‘07 07 Start UpStart Up
Henry(Victoria Domestic Gas)
FID Q4 FID Q4 ‘‘0707 Start UpStart Up
33.
Delivery Track Record in 2007Delivery Track Record in 2007
December 2007December 2007
August 2007August 2007May 2007May 2007
July 2007July 2007February 2007February 2007
May 2007May 2007
October 2007October 2007
September 2007September 2007
November 2007November 2007
34.
Webcast AgendaWebcast Agenda John ElliceJohn Ellice--FlintFlintCEO & Managing DirectorCEO & Managing Director
Result highlights, summary and outlookResult highlights, summary and outlook
2007 performance2007 performance
Key strategic value driversKey strategic value drivers
Eastern Australian gasEastern Australian gas
LNGLNG
Delivering the strategyDelivering the strategy
ConclusionConclusion
35.
Transforming Santos: a Leader in Asian EnergyTransforming Santos: a Leader in Asian Energy
A leader in A leader in AustraliaAustralia
Legacy assets in Legacy assets in exploitation phase, exploitation phase,
price growthprice growth Emerging Emerging Player in LNGPlayer in LNG
Series of growth Series of growth assets for globally assets for globally
priced gaspriced gas Building Asian PositionBuilding Asian Position
Extending franchiseExtending franchise
36.
ReferenceReferenceSlidesSlides
37.
2008 Forward Exploration Schedule2008 Forward Exploration Schedule
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
Q2 0833OilHoutman / AustraliaCharon 1
Q3 08 100GasBonaparte / AustraliaFrigate Deep 1
Q2 0855GasSorell / AustraliaJarver 1
Q2 0850GasOtway / AustraliaPecten East 1
Q3 0850GasOtway / AustraliaNetherby
Q3 0830GasBrowse / AustraliaIchthys North 1
Q2 0837.5OilBarrow / AustraliaJohnson 1
Q1 0837.5GasBay of Bengal / BangladeshHatia 1
Q4 08100OilGulf of Suez / Egypt South East July 1
Q4 0845GasEast Java / IndonesiaUbur-Ubur 1
Q4 0845GasEast Java / IndonesiaPare 1
Q4 0870OilFergana / KrygyzstanSoh 1
Q3 0870OilFergana / KrygyzstanTuzluk 1
Q2 0837.5OilNam Con Son / VietnamChim Cong 1
Q2 0837.5OilNam Con Son / VietnamChim Ung 1
%100 - 50050 - 1000 – 50
TimingSantos InterestUpside Resource Potential (mmboe)TargetBasin / AreaWell Name
38.
Vietnam UpdateVietnam Update
Country Entry
Exploration
Seismic
Development
Production
Country Entry
Exploration
Seismic
Development
Production
2006 2007 2008 2009 2010
Country/Basin EntryCountry/Basin Entry Seismic ProgramSeismic Program
WellWell Scheduled WellScheduled Well Oil DiscoveryOil Discovery
1st Production1st Production
FIDFID
Block 12Block 12 Block 101Block 101
Block 12Block 12
Block 12Block 12
Block 12, 101Block 12, 101
Block 12Block 12
Exploration and Development TimelineExploration and Development Timeline
39.
East Java Portfolio Update East Java Portfolio Update 50
kilometres
0
Sampang PSC
Madura Island
J a v a S e a
OyongMaleo
Surabaya
Madura Offshore PSC
Grati
Porong NorthBali lPSC
East Java
Bali
B a l iS e a
KangeanIslands
CentralJava
Brantas PSC Brantas PSCArea lll
ArealV
AreaV
Area ll
Area l
Jeruk
TanggulanginWunut
Sampang PSC
Madura Island
J a v a S e a
Maleo
Surabaya
Madura Offshore PSC
Grati
Porong
East Java
Bali
B a l iS e a
KangeanIslands
CentralJava
Brantas PSC Brantas PSC
Jeruk
TanggulanginWunut
OyongOyong Ph 2Ph 2(Gas to (Gas to GratiGrati Power Station)Power Station)Online Q3 2009Online Q3 2009Avg Production 56mmscf/dAvg Production 56mmscf/d
WortelWortelOnline Q2 2010Online Q2 2010Avg Production 40 Avg Production 40 -- 60mmscf/d60mmscf/d(Subject to FID)(Subject to FID)
OyongOyongOnline September 2007Online September 200745% Working Interest45% Working InterestAvg Production 8,000bbls/dAvg Production 8,000bbls/d
MaleoMaleoOnline September 2006Online September 200675% Working Interest75% Working InterestAvg Production 80mmscf/dAvg Production 80mmscf/d
40.
MutineerMutineer––Exeter Production UpdateExeter Production Update
• Reduced oil rates since December 2007
- electrical damage to FPSO swivel impacted sub sea pumps
• Shut-down for temporary repairs early February 2008
- Leased facility: opex relief, repair capex not to JV account
- Full repair planned end 2008
• On-line late March at ~ 20 to 22,000 bopd gross
• Workovers in Q2 2008 to increase production by ~ 2 to 4,000 bopd gross
41.
Darwin LNG Train 1 UpdateDarwin LNG Train 1 Update
• Increase in Santos Equity
- 10.64% to 11.39%
• Above budget 2007 production
• Excellent operating efficiency
• Optimisation studies commenced to investigate de-bottlenecking opportunities
42.
Darwin LNG Train 2 UpdateDarwin LNG Train 2 Update
• Key seismic appraisal results on track to allow greater clarity on LNG growth options
• 6,000 km2 3D over Barossa/Caldita and Evans Shoals processed (Q2 2008)
• 820 km2 over Petrel processed (Q2 2008)
• Material equity positions
• Alignment with ConocoPhillips
• Strong international interest
00 100100
KilometresKilometres
LegendSantos Acreage Gas FieldGas Pipeline Prospect
LegendSantos Acreage Gas FieldGas Pipeline Prospect
DarwinDarwin
SunriseSunriseAbadiAbadi
CalditaCalditaEvans ShoalEvans Shoal
BarossaBarossa
PetrelPetrel
TernTern
Santos (Op) 40%Shell 25%Petronas 25%Osaka Gas 10%
Santos 40%ConocoPhillips (Op) 60%
Bayu-Undan & DLNG1Santos 11.4%ConocoPhillips (Op) 56.7%Petrel
Santos 100%TernSantos 95%
FrigateProspect
Bayu UndanBayu
Undan
43.
ReindeerReindeer Gas Project UpdateGas Project Update
Sanction of New Domestic Gas Processing Hub 1Q08Sanction of New Domestic Gas Processing Hub 1Q08
- Santos 45%
- New onshore gas plant at Devils Creek, 40km SW of Dampier
• Facilities comprise- Offshore gas platform
- 105km 16” subsea pipeline
- Onshore gas processing (215 TJ/d)
- Connection to Dampier – Bunbury natural gas pipeline
• Gross recoverable resource 410 to 640 PJ
• Project Status and Milestones- Sanction end Q1 2008
- First Gas H2 2010
44.
Significant ItemsSignificant Items
2007 20062007 2006PrePre--tax Posttax Post--tax tax PrePre--tax Posttax Post--taxtax
Impairment write-down - - (16) (14)
Gain on asset sales 33 33 42 41
USA sale (68) (68) - -
Bayu Undan redetermination 47 33 - -
Sidoarjo mudflow incident (8) (8) (67) (67)
Moonie pipeline incident (38) (26) -
Embedded derivatives (12) (8) 19 14
Total (46) (44) (22) (26)
45.
SidoarjoSidoarjo Mudflow IncidentMudflow Incident
88--88PostPost--taxtaxChange
676722228989PostPost--taxtax
676722228989PrePre--taxtaxDecember 2006December 2006
757522229797PostPost--taxtax
757522229797PrePre--taxtaxDecember 2007December 2007
NetNet
$m$m
InsuranceInsuranceAccrualAccrual
$m$m
Estimated Estimated Costs Costs
ExpensedExpensed
$m$m
46.
20072007
(47)Bayu Undan redetermination
(33)Gain on asset sales
1,5281,528EBITDA adjustedEBITDA adjusted
68USA loss on sale
Amounts typically treated as “below the line”:
8Sidoarjo mud flow incident
12Embedded derivatives revaluation loss
24Moonie pipeline incident, excluding accelerated depreciation
1,496EBITDA1 as reported
$m$m
1 Earnings Before Interest, Tax, Depreciation, Depletion and Amortisation
EBITDA reconciliationEBITDA reconciliation
47.
20072007 20062006$m$m
NPAT 441 643Significant Items:
Impairment write-down - 14
Gain on asset sales - (41)
USA loss on sale 68 -
Sidoarjo mud-flow incident 8 67
Gain on sale investments (33) -
Moonie pipeline incident costs 26 -
Embedded derivatives revaluation loss/(gain) 8 (14)
Bayu-Undan re-determination (33) -
Underlying profit 485 669
Underlying ProfitUnderlying Profit
$m$m
48.
2008 Sensitivities 2008 Sensitivities
ChangeChange NPAT impactNPAT impact((A$mA$m))
SensitivitySensitivity
151%Interest rates
101 centA$/US$ exchange rate
13US$1/bblUS dollar oil price
49.
Prices & Exchange Rates Prices & Exchange Rates
(15)75.7887.24A$/US$ Exchange Rate
(after hedging)
63.713.95Average Gas Price A$/GJ
389.3592.10Realised Oil Price (A$/bbl)
1967.7180.35Realised Oil Price (US$/bbl)
ChangeChange20072007 20062006 %%