To: From: Date: Subject: UBS Conference Presentation · 19-06-2008 · Subject: UBS Conference...
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Santos Ltd A.B.N. 80 007 550 923 Ground Floor Santos Centre 60 Flinders Street Adelaide SA 5000 GPO Box 2455 Adelaide SA 5001 Telephone: 08 8116 5000 Facsimile: 08 8116 5623 To: Company Announcements Office ASX Ltd From: Company Secretary Date: 19 June 2008 Subject: UBS Conference Presentation Please find attached the presentation given to the UBS Sixth Annual Australian Resources & Energy Conference by Mr Peter Wasow which was held in Sydney today. James Baulderstone Company Secretary For personal use only
Transcript of To: From: Date: Subject: UBS Conference Presentation · 19-06-2008 · Subject: UBS Conference...
Santos Ltd A.B.N. 80 007 550 923 Ground Floor Santos Centre 60 Flinders Street Adelaide SA 5000 GPO Box 2455 Adelaide SA 5001 Telephone: 08 8116 5000 Facsimile: 08 8116 5623
To: Company Announcements Office ASX Ltd From: Company Secretary Date: 19 June 2008 Subject: UBS Conference Presentation Please find attached the presentation given to the UBS Sixth Annual Australian Resources & Energy Conference by Mr Peter Wasow which was held in Sydney today. James Baulderstone Company Secretary
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Santos: Beyond the 2P Peter Wasow, Chief Financial Officer
19 June 20081
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Disclaimer & Important Notice
This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, geotechnical factors, drilling and production results, gas commercialisation, development progress,operating results, engineering estimates, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates.
All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated.
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The Santos Portfolio
Reliable base business in Australia:Eastern Australia: price and volume growthCooper Oil: scalable exploitation opportunityWA: exploit asset position
Significant growth in LNG:GLNG: transformational growthPNG: high quality gas reservesDLNG: brown-field LNG growth
Focused growth in Asia:Indonesia: captured growthVietnam: first oil by 2010, expansionIndia/Bangladesh: Material exploration
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00
00
00
00
00
00
00
00
0
2
4
6
8
10
12
14
Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08
$A/G
J
West Texas Intermediate
0
50
100
150
96 97 98 99 00 01 02 03 04 05 06 07 080
5
10
15
20
25
30
0 15 30 45 60 75 90 105 120 135 150US$/bbl
US$
/mm
Btu
Being delivered into higher pricingContinuing high oil prices
Source: Woodmac, Global LNG Tool, Bloomberg, Santos
Santos average realised gas price
Domestic Australiannetback range
Average Asian LNG Price
LNG linked pricing in Western Australia
Closing arbitrage in Eastern Australia gas
LNG oil parity in Asia
Gas
Pric
e
Time
RL 3Qatargas-4
Tannguh
North WestShelf
MLNG
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With significant scope “beyond the 2P”
Cooper Tight Gas – next phase of unconventional growth
Cooper Gas – opportunity from improved recovery as prices re-rate
Cooper Oil – pursue high value scalable exploitation opportunities
Tirrawarra Oil / MCS1 –application of global technology to
local opportunity
Infrastructure – utilising footprint as gas market decouples
Asian Growth
LNG
Australia Base
GLNG – continuous multi-TCF reserves bookings, exploiting world class scalable CSG assets with leading LNG partner
PNG LNG – Expansion opportunities
Ichthys – good prospect in great neighbourhood
DLNG expansion – multiple pathways for brownfield expansion
Near-term oil and gas development in Oyong and Wortel
Multiple TCF gas prospects in Bay of Bengal
Near term oil development in Chim Sao/Dua
Significant oil prospects in Vietnam
PNG LNG – significant project underpinned by world class gas reserves
Volume growth –gas-fired power generation in CO2 constrained world
Price growth –arbitrage between domestic and export markets close
Gunnedah – future growth from multi-TCF quality assets
Eastern Australia Gas
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600
800
1000
1200
1400
1600
1800
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
PJ/a
Demand for Eastern Australia Gas
10 Year Historic Average
Demand will more than double within 10 years…
…driven by government carbon policy and LNG export
Source: NEMMCO, Santos, company announcements
PlannedLNG
Projects
Carbon driven fuel switching
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$0
$40
$80
$120
CCGT Dry Brown Coal Dry Black Coal
$/M
Wh
Base Long Run Marginal Cost (LRMC) $50/t carbon Incremental LRMC
Source: Santos, SKM
+$3.50 +$5.00
Increasing Value of Gas due to Carbon
Impact of carbon cost on electricity prices
Implied gas price increase
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Energy Market DifferentialsPrices available in domestic and export markets
(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
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2
4
6
8
10
12
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Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08
$A/G
J
Santos average realised gas price
Domestic Australiannetback range (2)
Average Asian LNG Price (1)
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0
2
4
6
8
10
12
14
16
1991
1993
1995
1997
1999
2001
2003
2005
2007
Hen
ry H
ub P
ric e
3.6
1.1
0.3
5.7
1.8
1.1
0
1
2
3
4
5
6
Tight gas sands Coalseam methane Gas shales
Nat
ural
gas
pro
duct
ion
(tcf
/yr)
1996 2006
Reserves & production grow as prices increase
259
55 52
379
73
128
0
50
100
150
200
250
300
350
400
Tight gas sands Coalseam methane Gas shales
Tec
hnic
ally
rec
over
able
vol
umes
(tc
f)
1996 2006Source: Bloomberg, Oil & Gas Journals
Production
ReservesPrice
Significant growth in Cooper:US analogy: ~60% reserve growthConventional: 3+TCF in additional
recovery potentialUnconventional: 7+TCF in
prospective resources
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Growth in LNG
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Legend
LNG PlantSTO Relative SizeExplorationDevelopmentProduction
2020 LNG Growth Aspiration
Browse LNG
Santos (Op): WA-274-P 30%Santos (Op): WA-281-P 47.83%
DLNG2
Santos (Op): Petrel 95%Santos (Op): Tern 100%Santos (Op): Evans Shoal 40% Santos: Barossa Caldita 40%
AspirationalAspirational LNG Production by 2020:LNG Production by 2020:Gross Gross STOSTO
(Mtpa)(Mtpa) (Mtpa)(Mtpa)GLNGGLNG 1010 66PNG LNGPNG LNG 1010 1.81.8DLNGDLNG 66 < 2< 2Browse LNGBrowse LNG 1010 <0.5<0.5
Kutei LNG
Santos: 20-50%DLNG1 & Bayu-Undan
Santos 11.4%
PNG LNG
Santos: 17.7%
GLNG
Santos (Op): 60%
GLNG
DLNG
PLNG
Kutei
Browse
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CSG Assets
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Canada
Qatar
US
Russia
Iran
ME
Nigeria
Algeria
Indonesia
Malaysia
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16159
743 177
300
90
164
Proven gas reserves (bboe)
Proven oil reserves (bbl)
Unconventional gas (bboe) economically recoverable
Proven unconventional oil (bbbl)
*3P
40
CSG +40bboe Resource potential
20*
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33
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CSG: Globally Significant in an Access Constrained World
Full IOC Access (85%)
Soviet NOC1970
NOC Reserves(78%)
RussianIOC
2007
Map: BP statistical review, June 2007, journalsPie Chart: Adapted from PFC Energy
Partial list for comparison
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acceptable good
Santos CSG Assets are World Class
Scotia
Coal Thickness
Black Warrior
Powder River
San Juan
Roma
Fairview
GIP/WellSpacingFlow RateSaturationPermeabilityGas ContentField
Source: JPT February 2008, Santos
Fairview, Roma and Scotia rank amongst the world’s best CSG assets
best in classSantos assets
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CSG Reserve Development
1P3P 2PPROPECTIVERESOURCE
CONTINGENT RESOURCE
Geologicalreview
Core holesGeologicalreviewSeismic
Core holes Core holesPilot wells
Pilot wellsDevelopment wellsField development
GD
Qld
40,000 PJ
427* PJ1,035* PJ2,911* PJ7,523* PJ21,000 PJ
GD: Gunnedah *Adjusted for 40% Sell Down
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PEL 450
New South Wales
Quirindi
Gunnedah
Scone
Coonabarabran
Dunedoo
LegendSantos acreageGas pipeline
Gunnedah Basin
Santos has secured access to majority acreage positions (up to 21,000 km2 gross)
Quality and material land position to allow building of major new business
All Santos operated
Up to 20 coreholes in next 18 months
Contingent gas resource, first booking expected in 2009
Legend
PELA93
PEL12
PEL 1
PEL 452
PEL 456
40TCF prospective resource…
Gladstone LNG
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Santos: Leading the way in CSG to LNG
2008 FEED
FID2009/10
First Gas2014
Pre-FEED by Foster Wheeler and Bechtel
PETRONAS selected as partner
Environmental applications lodged
Significant project status awarded
Freehold land acquired for liquefaction facilities
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The Transaction Announced
Partner PETRONAS is a global top 3 LNG producer, number one Asian producer and largest LNG shipper
Participation 40% interest in Integrated Project
Amount US$2.508 billion consisting of US$2.008 billion plus US$500 million upon FID of GLNGTM Train 2 using JV gas
AlignmentSantos and PETRONAS fully aligned across the value chain: upstream resource, development, operation and LNG marketing
OperatorSantos to continue as upstream operatorJoint operating company will develop and operate the pipeline and LNG plant and undertake marketing
Completion Expected to close within 3 months
Assets Structure ensures assets and revenues held directly by Santos and PETRONAS
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PNG LNG & Darwin LNG
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PNG LNG Builds Momentum
Pre FEED work on two train 6.3 mtpa plant
Marketing RepresentativeAgreement
Coordinated Development and Operating Agreement
Gas Agreement
FEED Entry Decision
Marketing commenced
Finance strategy
Buyer Heads of Agreement
Final Investment Decision
PNG LNG is moving toward final investment decision…
4Q 08
4Q 09
4Q 08
Hides & Angore
GobeKutubu & Agogo
Juha
Port MoresbyLNG Plant
MarineTerminal
LegendGas processing facilityOil pipelineGas pipelineCondensate pipeline
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Timor Bonaparte/Browse: hot propertyMajor parties enter and confirm acreage value …
NorthernTerritory
WesternAustralia
LegendSantos acreageOther acreageOil fieldGas fieldOil pipelineGas pipeline
Darwin
PETRONAS 3Q 2007
Sinopec 2Q 2008
ENI Renewing
OMVShell 1Q 2007
Total 2Q 2008
Murphy 3Q 2007
Apache/Total 2Q 2008
CNOOC 3Q 2007Total 3Q 2007
Sinopec
ExxonMobil 3Q 2007
Reliance 3Q 2007
Wrap up
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Santos: “Beyond the 2P”
Cooper Tight Gas – next phase of unconventional growth
Cooper Gas – opportunity from improved recovery as prices re-rate
Cooper Oil – pursue high value scalable exploitation opportunities
Tirrawarra Oil / MCS1 –application of global technology to
local opportunity
Infrastructure – utilising footprint as gas market decouples
Asian Growth
LNG
Australia Base
GLNG – continuous multi-TCF reserves bookings, exploiting world class scalable CSG assets with leading LNG partner
PNG LNG – Expansion opportunities
Ichthys – good prospect in great neighbourhood
DLNG expansion – multiple pathways for brownfield expansion
Near-term oil and gas development in Oyong and Wortel
Multiple TCF gas prospects in Bay of Bengal
Near term oil development in Chim Sao/Dua
Significant oil prospects in Vietnam
PNG LNG – significant project underpinned by world class gas reserves
Volume growth –gas-fired power generation in CO2 constrained world
Price growth –arbitrage between domestic and export markets close
Gunnedah – future growth from multi-TCF quality assets
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Contact Information
Registered and head officeShare RegisterAdelaideGround Floor, Santos Centre60 Flinders StreetAdelaide, South Australia 5000GPO Box 2455Adelaide, South Australia 5001Telephone: +61 8 8116 5000Facsimile: +61 8 8116 5050
Useful email contactsShare register enquiries:[email protected]
Investor enquiries:[email protected]
Andrew NairnGroup Executive Investor RelationsLevel 10, Santos CentreDirect: + 61 8 8116 5314Facsimile: +61 8 8116 5131Email: [email protected]
Brooke PedersenInvestor Relations AnalystLevel 10, Santos CentreDirect: + 61 8 8116 7227Facsimile: +61 8 8116 5131Email: [email protected]
Website:www.santos.com
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