Overview Kevin Gallagher Managing Director and CEO 3
Santos strategy Create shareholder value by becoming a low-cost, reliable and high performance business + New leadership team and simplified operating model to deliver a low- Transform cost, reliable and high performance business +…
2016 in review Strong progress made to stabilise the business, reduce costs and strengthen the balance sheet. Stabilise the business Reduce costs Strengthen the balance sheet + Excom appointed + Free cash flow breakeven + A1,040…
2016 Full-year financial snapshot Net loss of US1,047 million, after US1.1 billion after tax GLNG impairment at half-year. EBITDAX down 18% to US1,199 million and Underlying NPAT up 29% to US63 million Free cash flow Unit upstream…
Turnaround strategy starting to deliver Free cash flow breakeven reduced to US36.50/bbl + US370 million in free cash 2016 free cash flow (before asset sales) by month USmillion flow (before asset sales) over last eight months of 200…
Institutional placement and SPP Institutional placement and share purchase plan successfully raised A1.24 billion Proceeds to be used to strengthen the balance sheet and pursue growth opportunities that are aligned to the core business…
Strong safety performance has been maintained Lowest three-year rolling average lost time injury frequency rate (LTIFR) in five years, with a number of operations achieving record LTI-free periods Lost Time Injury Frequency Rate three…
2016 Full-year financial results Anthony Neilson CFO 10
Financial priorities Focus on reducing costs, increasing free cash flow, debt reduction and capital management + Unit production cost/boe down 18% to US8.45/boe Reducing costs + Capex down 51% to US625 million + US635 million…
Financial performance EBITDAX down 18% to US1,199 million. Underlying NPAT up 29% to US63 million Full-year Full-year + Revenue up 6% to US million Var 2016 2015 US2.6 billion due to higher sales volumes partially offset by lower…
Production Record annual production of 61.6 mmboe due to growth in LNG volumes mmboe 70 + Highest annual production due 61.6 55-60 to ramp-up of GLNG and strong 60 57.7 performance from core assets 54.1 51.0 50 + 2017 guidance 55-60…
Sales volumes Record annual sales volumes of 84.1 mmboe due to growth in gas and LNG sales volumes mmboe 90 + Highest annual sales volumes 84.1 73-80 due to ramp-up of GLNG own 80 and third party sales and strong 70 64.3 performance…
Sales revenue Sales revenue up due to higher gas and LNG sales volumes, offset by lower prices Full-year Full-year + Higher sales revenues due to US million Var higher gas and LNG volumes, 2016 2015 partially offset by lower prices…
Production costs Upstream unit production costs down 18% to US8.45/boe Full-year Full-year Var US million 2016 2015 Production costs 520 597 (13)% + Upstream unit production costs down 18% to US8.45/boe Production cost 8.45 10.35…
Capital expenditure 2016 capex down 51% to US625 million 2017 capex guidance maintained at US700-750 million Full-year capital expenditure + 2016 capex 51% lower due to USmillion + Completion of GLNG 3,500 + Completion of PNG LNG…
Cash flow US635 million in free cash flow before funding, including US429 million net proceeds from asset sales. Free cash flow breakeven reduced to US36.50/bbl Full-year Full-year Var USmillion 2016 2015 Operating cash flow 857 811…
Debt reduction Net debt reduced to US3.5 billion as at December 2016. Gearing reduced to 33% Balance sheet strengthened. Refinancing capability and capacity improved + Placement in December 2016 plus 2016 movement in net debt completed…
Debt structure provides flexibility Refinancing and terming-out maturities will commence in 2017 Drawn debt maturity profile as at 31 December 20161 Breakdown of drawn debt facilities USmillion as at 31 December 2016 1,800 Euro hybrid…
Hedging reduces impact of commodity price volatility Significant oil price leverage remains 2017 Zero-cost three-way collar hedge + 11 million barrels hedged in 2017 using zero-cost three- 65 way collars Long Put 60 US50 Short Put…
Operations review Kevin Gallagher Managing Director and CEO 22
Focus on five core long-life natural gas assets Portfolio simplification to drive improved performance and further productivity gains Cooper Basin GLNG PNG Northern Australia WA Gas + Build + Build gas + Strengthen + Large…
Cooper Basin Delivering a low cost, cash flow positive business Cooper Basin Asset KPIs 2016 2015 Production (mmboe) 15.1 15.5 Sales volume (mmboe) 23.5 20.8 Revenue (USm) 768 851 Production cost 10.7 12.7 (US/boe) EBITDAX…
GLNG Transforming GLNG to deliver steady-state operations and a cash flow positive business Aiming to ramp-up GLNG LNG sales from current levels to 6mtpa over three years GLNG Asset KPIs1 2016 2015 GLNG Production (mmboe) 9.5 4.2…
PNG Independent resource certification supports extended LNG production at current plateau rates Muruk discovery (Santos 20%) appraisal underway PNG Asset KPIs 2016 2015 Production (mmboe) 11.9 11.4 Muruk Hides Sales volume (mmboe)…
Northern Australia Extensive discovered resource to backfill and expand existing LNG infrastructure Barossa appraisal commenced with first of two wells spudded Northern Australia Asset KPIs 2016 2015 Production (mmboe) 4.2 4.3…
WA Gas Low cost operations with capacity and reserves to meet short and long-term demand WA Gas Asset KPIs 2016 2015 Production (mmboe) 8.9 9.4 Sales volume (mmboe) 8.8 9.4 Revenue (USm) 184 227 Production cost 5.1 5.0…
Non-core assets Packaged and run separately for value as a standalone business Portfolio to be continually optimised to maximise value Asset KPIs 2016 2015 Non-core assets Production (mmboe) 11.7 12.7 Onshore Offshore Asia Australia…
Reserves 1P reserves increased by 61 mmboe before production (106% organic RRR) 2P reserves increased by 6 mmboe before production (19% organic RRR) + Higher WA Gas due to reserves upgrade at Reindeer Reconciliation of 2P reserves…
Summary Disciplined, focused strategy to drive shareholder value + Free cash flow breakeven reduced to US36.50/bbl1 Turnaround + Free cash flow positive for last eight months of 2016 + Five core long-life natural gas assets at…
2016 Full-year results Appendix 32
Significant items Reconciliation of full-year net loss to underlying profit Full-year Full-year USmillion 2016 2015 Net profit/(loss) after tax (1,047) (1,953) Add/(deduct) significant items after tax Impairment losses 1,101…
2016 Segment results summary Corporate Full-year 2016 Cooper Northern Other explorn & USmillion Basin GLNG PNG Australia WA Gas Assets elimins Total Revenue 768 540 444 145 184 411 135 2,627 Production costs (162) (61) (56) (73)…
2015 Segment results summary Corporate Full-year 2015 Cooper Northern Other explorn & USmillion Basin GLNG PNG Australia WA Gas Assets elimins Total Revenue 851 123 566 215 227 473 23 2,478 Production costs (197) (36) (61) (81)…
Liquidity and net debt US4.3 billion in cash and committed undrawn debt facilities as at 31 December 2016 Liquidity (USmillion) 31 Dec 2016 31 Dec 2015 Cash 2,026 839 Undrawn bilateral bank debt facilities 2,313 2,637 Total…
2017 Guidance After adjusting for asset sales, 2017 sales volumes expected to be between 73 and 80 mmboe and production to be between 55 and 60 mmboe 2017 Guidance + 2017 Sales and production volumes influenced by: Sales volumes 73-80…
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