2007 Full Year Results - Santos...1. 2007 Full Year Results John Ellice-Flint - Chief Executive Officer Peter Wasow - Chief Financial Officer 21 February 2008 2. Disclaimer & Important

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.





LNGLNG



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


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.


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


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





LNGLNG



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.






LNGLNG



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)


Oyong PhII(Indonesia Domestic Gas)

FID Q4 FID Q4 ‘‘07 07 Start UpStart Up

Henry(Victoria Domestic Gas)


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.






LNGLNG



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 %%

Documents

2007 Full Year Results - Santos...1. 2007 Full Year Results John Ellice-Flint - Chief Executive Officer Peter Wasow - Chief Financial Officer 21 February 2008 2. Disclaimer & Important