2015 Third Quarter Activities Report

GLNG successfully delivered on time and within budget. 2015 LNG sales volumes surpass 1 million tonnes

Santos today announced that its year-to-date equity share of LNG sales volumes exceeded 1 million tonnes during the third quarter.

LNG sales volumes have more than doubled in 2015 and growth is expected to continue in the fourth quarter following GLNG shipping its first cargo from Curtis Island last week.

Third quarter production of 14.5 million barrels of oil equivalent (mmboe) was 4% higher than the corresponding quarter and 10% higher in the year-to-date.

Santos Managing Director and Chief Executive Officer David Knox said both PNG LNG and Darwin LNG delivered strong production in the quarter and GLNG would make an excellent addition to that profile.

“The delivery of GLNG is one of the most significant milestones in our company’s history. It marks Santos’ transition from a domestic gas company to an important Asian LNG player,” Mr Knox said.

“The Seri Bakti which is carrying the first cargo from GLNG will arrive in South Korea in the coming days. GLNG is the final piece of our robust LNG portfolio, which will provide a strong source of revenue for decades to come.”

More broadly, Mr Knox said the company was continuing to successfully drive its cost reduction program.

“We said that we would produce more for less and this quarter’s figures are a strong reflection of that. Year to date production is up 10% while capex is down 55% and unit production costs are down 15%.”

Sales revenue fell 24% with the average realised oil price of A$71 per barrel down 38% compared to the corresponding quarter last year.

Capital expenditure guidance for 2015 has been lowered by a further 10% to $1.8 billion. Production guidance for 2015 is narrowed to 57 to 59 mmboe (previously 57 to 64 mmboe). All other guidance is maintained.

Santos announced on 21 August 2015 that it would conduct a thorough strategic review of all options to restore and maximise shareholder value. The strategic review is ongoing, and will continue to consider all proposals which deliver appropriate value and certainty for shareholders.