Full Year 2024 Santos Ltd Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dale Koenders - Barrenjoey - Analyst : Morning, Kevin and team. I was hoping you could provide a bit more color around the cost-out target. How are you thinking it breaks down between OpEx and sustaining CapEx and what this means for your sustaining CapEx outlook over the medium term?

Question: Dale Koenders - Barrenjoey - Analyst : Okay. And then just confirming that's incremental to the free cash flow outlook provided in August last year?

Question: Dale Koenders - Barrenjoey - Analyst : Okay. And then the second question, just in terms of reference to Papua LNG FID ready targeting '25 dropped and talking more about APF, FID-ready '26. Is this a delayed to the project and backfilling with other resource now? Is that what we should be expecting?

Question: Dale Koenders - Barrenjoey - Analyst : Okay. Thanks, guys.

Question: Henry Meyer - Goldman Sachs Australia Pty Ltd - Analyst : Morning Kevin, Sherry. Thanks for the update. A clear focus this year is Barossa delivery and ramp up. Now that we're getting close to start-up, could you step through the expected time line from first gas to sales lifting? Any variables that could change that?

Question: Henry Meyer - Goldman Sachs Australia Pty Ltd - Analyst : Great. That's clear. And your LNG contract position remains very strong. Could you share if there's any contract repricing at GLNG in the near term? And also, any details on plans for the Barossa contract, which we understand has some flexibility to perhaps move away from JKM indexation?

Question: Henry Meyer - Goldman Sachs Australia Pty Ltd - Analyst : Got it. That's great. Thanks, Kevin. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 12:00AM, STO.AX - Full Year 2024 Santos Ltd Earnings Presentation

Question: Adam Martin - E&P - Analyst : Yeah, morning, Kevin, Sherry. Perhaps you just touched on decommissioning spend. I mean one of your peers had a pretty big uplift on spend for the next 12 months. Just give us some insight next three, four years? We're sticking around the $300 million level, but just also perhaps talk around any large pieces of work or just general inflation that you're seeing in the decomm space well, please?

Question: Adam Martin - E&P - Analyst : Okay. That makes sense. And just on slide 26, you've got a lot of different sort of backfill growth options. Are there any there that you think is sort of winning the race at the moment in front of the queue. I'm just sort of more thinking at '26, '27 when you delivered to Alaska and Barossa uplift?

Question: Adam Martin - E&P - Analyst : Okay, thank you. That's great.

Question: Nik Burns - Jarden Australia - Analyst : Yes, thanks for taking my questions. The first one is just -- or just a follow on from Adam's one there on slide 26. I guess, I just have another question. Just trying to link it back to your change in capital allocation framework you announced in November last year. Now that it does include growth CapEx. It is quite important for us to get a reasonable steer on exactly what growth is going to come through when? And from what you just said, it doesn't sound like any of these material, I guess, chunkier growth -- new growth projects are likely to reach FID maybe this year or maybe even next year and the focus is going to be more on backfill. So is that the right way to think about it? What do we -- how do we think about sort of annualized or average growth CapEx over the medium term? And given you have flagged these backfill opportunities, that ultimately appears in your sustaining CapEx. So should we be thinking that your sustaining CapEx will lift over the next few years as these projects start to come through as well? Thank you.

Question: Nik Burns - Jarden Australia - Analyst : Yeah, you were on the role. You're talking about backfill for LNG, talking about the Beetaloo that's the last we heard.

Question: Nik Burns - Jarden Australia - Analyst : That's great Thanks for the extra color, appreciate it. And my second question, you just talked before about Barossa ramp-up. I just wanted to touch on Pikka. It sounds like things are going well on the pipeline activities there, but -- and maybe that's no longer on the critical path, but it sounds like you need to barge some equipment in and now maybe that's on the critical part. Can you just talk about what challenges do you foresee there? And what our best case start-up time line looks like now?

Question: Nik Burns - Jarden Australia - Analyst : Perfect. Thanks, Kevin.

Question: Tom Allen - UBS Securities Australia Ltd - Analyst : Hey, good morning, Kevin, Sherry and the Board team. I was hoping you could please discuss any broader opportunities that you see in the portfolio to accelerate deleveraging and lift those capital returns. So obviously, when Barossa and Pikka come online, that will be the big drivers. But thinking back to 2016 at the outset of your strategy to improve shareholder returns, you had an asset recycling initiative that was successful in contributing to that strategy. Santos also looked at infrastructure tolling with third parties. So do you see opportunities for these types of broader initiatives in the current portfolio?

Question: Tom Allen - UBS Securities Australia Ltd - Analyst : That's clear, thanks. Final question relates to third-party gas supply into GLNG. So the first material contract expiry occurs on May 30 this year. Can you share what proportion of the expiring contract has been recontracted with supply from the domestic market? And can you comment on whether you expect GLNG to face constraints in recontracting expiring third-party gas for the broader East Coast domestic market over the next five years?

Question: Tom Allen - UBS Securities Australia Ltd - Analyst : Thanks Kevin.

Question: Saul Kavonic - MST Marquee - Analyst : Hi, Kevin. Thank you. I'm going to come back just on the GLNG backfill questions. It's obviously been reported in some press that, for example, the Meridian Gas Plant is for sale and GLNG being a lead contender for that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 12:00AM, STO.AX - Full Year 2024 Santos Ltd Earnings Presentation I don't expect you to comment on that, but just perhaps more broadly, should investors at least consider the possibility that there might be some acquisitions for backfill of GLNG. And if there is acquisitions, would that -- the price take for any acquisitions factor into free cash flow for dividend purposes?

Question: Saul Kavonic - MST Marquee - Analyst : Understood. I guess, the follow-up to that is if you've got CSG drilling rolling off later this decade, and you need to -- and you do ultimately do something to increase that drilling elsewhere that's going to be CapEx, which is not factored into the all-in free cash flow outlook previously provided?

Question: Saul Kavonic - MST Marquee - Analyst : Yeah. Understood. And lastly, just on Barossa. Can you just walk us through the time frame for when the FPSO would -- the floater would leave Singapore to first gas? And if there's any outstanding approvals which present risk to that schedule?

Question: Saul Kavonic - MST Marquee - Analyst : Great. Thank you so much. Thanks Saul.

Question: Mark Wiseman - Macquarie Research - Analyst : Good day, Kevin and Sherry. Thanks for the update today. Just on the market valuation of the company. I guess, since the Oil Search deal, the value recognition by the market has been disappointing. We think these assets are worse a lot more than what the market has been willing to pay. And back in 2023, you did sort of acknowledge the potential for corporate interest and or restructuring. I just wonder, with the growth starting to come through, really, by the end of the year, it sounds like your growth strategy is largely delivered either by the end of this year or early 2026. In terms of self-help to get that value uplift better recognized, are there any levers that you can pull in terms of demergers or asset sales? Is there anything you're thinking about or strategizing that you can talk about?

Question: Mark Wiseman - Macquarie Research - Analyst : Okay. That's clear. And just final question. Perhaps this one is for Sherry. Just on the tax losses on the balance sheet have gone up a little. Could you just remind us, when do you expect to start paying Australian corporate tax again? And as these dividends are expected to rise over the next several years, just wondering when you can start franking them? Thanks.

Question: Mark Wiseman - Macquarie Research - Analyst : Okay, great, thank you

Question: James Byrne - Citi - Analyst : Morning team. Just conscious of the time, I'll keep these super brief. Just conscious not to double count the benefit of the cost outs. Can I presume that there's little to none of that in the guidance for 2025 for either CapEx or unit production costs?

Question: James Byrne - Citi - Analyst : Very clear. Secondly, Alaska. You've got very good drilling performance, Kevin, 25% sort of savings on drilling time, I think it was. There's no CapEx reduction in that project. I'm just wondering whether the savings you're making on drilling are absorbing higher costs elsewhere? And earlier on the call, you called out some of those logistics challenges?

Question: James Byrne - Citi - Analyst : I might actually just squeeze in another super quick one. Beetaloo some drilling coming up over the next sort of 12 to 24 months, what success looks like in Beetaloo?