AUSTRALIA'S SANTOS SALES REVENUE UP 10%

SANTOS - 22 Jan 2020 - 2019 Fourth Quarter Activities Report 

Record annual production, sales volumes and sales revenue 

• Annual production of 75.5 mmboe was a record for Santos and 28% above the prior year
• Record annual sales revenue of over $4 billion, up 10%, generated from sales volumes of 94.5 mmboe
• Fourth quarter production of 18.7 mmboe was 5% lower than the prior quarter primarily due to domestic gas customer outages in Western Australia  

Disciplined operating model driving stronger onshore performance 

• Cooper Basin annual production increased for the second consecutive year, driven by strong operating performance and a record 115 wells drilled
• Higher GLNG sales driven by stronger upstream equity gas production and a record 393 wells drilled. GLNG ~6.2 mtpa sales run-rate now expected from 2020  

Record free cash flow and lower production costs 

• Record free cash flow of over $1.1 billion in 2019
• Production costs of ~$7.25/boe were 10% lower than the prior year and at the bottom end of guidance  

Acquisition of ConocoPhillips’ business in northern Australia and Timor-Leste 

• Value accretive acquisition of ConocoPhillips’ operating interests in Darwin LNG, Bayu-Undan, Barossa and Poseidon announced in October for $1.39 billion plus a $75 million contingent payment subject to FID on Barossa
• Fully-funded from existing cash resources and new committed debt
• Completion expected in the first quarter of 2020, subject to third-party consents and regulatory approvals  

Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos delivered record annual production and revenues in 2019, and lower unit production costs, clearly demonstrating the effectiveness of our disciplined, cash generative operating model. 

“The year was highlighted by highest ever free cash flow of more than $1.1 billion, record onshore drilling performance, lower unit production costs and significant progress on our diversified portfolio of growth projects.” 

“The acquisition of ConocoPhillips’ natural gas assets in northern Australia and Timor-Leste announced in October is fully aligned with our growth strategy to build on existing infrastructure positions and delivers operatorship and control of strategic LNG infrastructure at Darwin.” 

“Also in the Northern Territory, better than expected gas flow rates from the ongoing Tanumbirini-1 vertical well test are very encouraging and an important step in Santos’ appraisal of the significant resource potential of the McArthur Basin.” 

“Natural gas is forecast to supply a quarter of the world’s total energy demand by 2040 and Santos, with its portfolio of long-life natural gas assets, is well positioned to benefit as we seek to deliver 120 mmboe of production by 2025.” 

“We are also investing in projects to lower emissions and assessing the significant potential for carbon capture and storage in the Cooper Basin,” Mr Gallagher said.

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