19July2018
KeyHighlights
ProductiongrowthincoreCooperBasinandWAgasassets
CooperBasingasproductionup8%andoilproductionup17%comparedtothepriorquarterduetostrong
performancefromrecentlyconnectedwellsmorethanoffsettingtheimpactofahigherlevelofplanned
maintenanceatMoomba.QuarterlyCooperBasinoilproductionwasthehighestinfouryears.
FastestevergaswelldrilledintheCooper:Marabooka-18developmentwell3.1daysfromspudtorig
release.SuccessfuloutcomesfromCooperexplorationprogram.
WAgasproductionup10%comparedtothepriorquarterduetohighercustomerdemandand
commencementoftwonewsalescontracts.
Secondquarterproductionof14.2millionbarrelsofoilequivalent(mmboe)washigherthanthepriorquarter
duetostrongproductionfromtheCooperBasinandWesternAustraliagas,combinedwiththerestartin
PNGLNGproductionfollowingmajorearthquakeactivityinFebruary.Offsettingthesefactorswasaplanned
one-monthmaintenanceshutdownofBayuUndan/DarwinLNGduringthequarter.
Strongrevenuegrowthnotwithstandingshutdownactivity
Firsthalfsalesrevenueup16%toUS$1.7billionduetostrongercommoditypricesandhigheroilsales.
ThestrongincreaseinrevenuewasachieveddespitethePNGLNGoutageandplannedshutdownsat
MoombaandBayuUndan/DarwinLNGwhichreducedfirsthalfproductionbyabout2mmboeandsales
revenuebyapproximatelyUS$80million.
Growthprojectupdates
BarossaprojectentersFEED.Barossaistheleadcandidatetounderpinthelong-lifeextensionofDarwin
LNGandwouldmorethandoubleSantos’currentNorthernAustralianproduction.Afinalinvestmentdecision
istargetedtowardstheendof2019.
InPNG,SantosisindiscussionsregardingaproposalreceivedforSantostofarm-intoPRL3(P’nyang).
InQueensland,theScotiaCF1projectwassuccessfullycompletedaheadofscheduleandunderbudget,and
fieldproductionisramping-upwithcurrentratesalreadyexceeding50TJ/day.Romaiscurrentlyproducing
morethan70TJ/day.TheinitialphaseofdevelopmentoftheArcadiafieldwassanctionedduringthesecond
quarterwithfirstproductionexpectedinlate2019,whileencouragingresultscontinuetobeachievedwith
theMira-6pilotwellintheMahalofield.
Strongbalancesheettosupportgrowthstrategy
Asat30June2018,SantoshadcashandcashequivalentsofUS$1.5billionandtotaldebtofUS$3.9billion,
resultinginnetdebtofUS$2.4billion.NetdebtincludesUS$145millionoilhedgingmark-to-marketliability.
Newdividendpolicyannounced.Boardtoconsiderareturntodividendsatthe2018half-yearresults
Santos’newdividendpolicywillseethecompanylooktopayordinarydividendsthataresustainablethrough
theoilpricecycleandwilltargetarangeof10%to30%payoutoffreecashflowperannum.
Giventhecyclicalnatureoftheindustry,theBoardwillalsoconsideradditionalreturnstoshareholders
abovetheordinarydividendwhenbusinessconditionspermit.
AssetsalesconsistentwithSantos’strategytorealisevaluefromnon-coreassets
Duringthequarter,Santosannouncedthesaleofitsnon-coreAsianportfolioforUS$221millionandthe
completionofthesaleofitsDenisonTroughconventionalassetsinQueenslandforuptoA$43million.
Mediaenquiries Investorenquiries SantosLimitedABN80007550923
DanielaRitorto AndrewNairn GPOBox2455,AdelaideSA5001
+61881165167/+61(0)455319770 +61881165314/+61(0)437166497 T+61881165000F+61881165131
daniela.ritorto@santos.com andrew.nairn@santos.com www.santos.com
Santosshare Units Q22018 Q12018 Change 2018YTD 2017YTD Change
Production mmboe 14.2 13.8 3% 28.0 29.5 -5%
Salesvolume mmboe 19.1 18.9 1% 38.0 40.1 -5%
Averagerealisedoilprice US$/bbl 78.6 71.6 10% 75.4 54.8 37%
Salesrevenue US$million 886 794 12% 1,680 1,453 16%
Capitalexpenditure1 US$million 167 139 20% 306 321 -5%
1Capitalexpenditureincludingrestorationexpenditureandacquisitionofexplorationassetsbutexcludingcapitalisedinterest.
SantosManagingDirectorandChiefExecutiveOfficerKevinGallaghersaid:“Santos’strategyhasbeentoestablishalowcostoperatingmodelthatisdesignedtodeliverstrongcashflowsthroughtheoilpricecycle.”
“Oursecondquarterresultsdemonstratethestrengthofourdiversifiedportfolioofcoreassetsunderpinnedbyadisciplinedoperatingmodelandsignificantlystrongerbalancesheet.”
“IntheCooperBasin,wedeliveredproductiongrowthduetostrongperformancefromrecentlyconnectedwells,includi
