Half Year 2022 Santos Ltd Earnings Call Transcript

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

Question: Dale Johannes Koenders - Barrenjoey Markets Pty Limited, Research Division - Analyst : Just a couple of quick questions. Firstly, just building on your comments, Kevin, around shipyards and COVID impacts and labor shortages and et cetera and the challenges for Dorado. Can you sort of explain why those pressures are any different for the Darwin backfill project? And why we should be anticipating delays in CapEx broadly?

Question: Dale Johannes Koenders - Barrenjoey Markets Pty Limited, Research Division - Analyst : Okay. So no CapEx overrun anticipated I guess, the takeaway. Secondly, just on the structure of the dividend with free cash flow effectively the tier above $65 a barrel. Should we continue to -- should we assume that going forward, that continues to be a buyback on market? Or will that vary between dividends and buybacks and other things?

Question: Dale Johannes Koenders - Barrenjoey Markets Pty Limited, Research Division - Analyst : Okay. But I guess the signal is you think it's a good investment in your stock at the current share prices?

Question: Dale Johannes Koenders - Barrenjoey Markets Pty Limited, Research Division - Analyst : And then Finally, just on CapEx for the East Coast gas market, your joint venture partner Beach has sort of spoken about $0.5 billion over the next 12 months. A lot of that is western flank oil, not a project you're involved in. But drilling for the Cooper Basin JV 100 wells per annum, do you think that, that rate will continue indefinitely over the next few years? And what sort of contributions to production increases do you think that, that will provide?

Question: Gordon Alexander Ramsay - RBC Capital Markets, Research Division - Analyst : Congratulations, Kevin, on Pikka. I mean it's very rare that you see a billion barrels of recoverable oil in an OECD country in a pro development stage. So I think potentially, it will be an outstanding project. Just on Pikka, there had previously been some press commentary about road access and the potential cost of that and how that could affect the project go ahead. Assuming you've FID-ed now, has that all been sorted out?

Question: Gordon Alexander Ramsay - RBC Capital Markets, Research Division - Analyst : And again, on this project now that Willow looks like it's getting -- moving forward with the environmental aspects of that project potentially getting approved. Is there any potential to work with ConocoPhillips on accessing some key equipment that might be similar? Or has there been any discussion at all about that to try and lower cost?

Question: Gordon Alexander Ramsay - RBC Capital Markets, Research Division - Analyst : Okay. And just jumping across to Dorado. I think Anthea had mentioned that and you followed it up with further appraisal drilling on [Pavo]. Clearly, that you also mentioned you wanted to firm up gas. Can we be looking towards a multi-well program in the future in the Bedout sub-basin?

Question: Nik Burns - Jarden Limited, Research Division - Analyst : Just another question on Alaska. Overall, the numbers you presented today look broadly in line with what Oil Search was presented, say, 18 months ago. Can you just talk about the work that you've undertaken since taking over the project? And are you comfortable with the work that Oil Search did? And whether you've made any changes in scope in any way? Or is it essentially identical to the project that Oil Search was proposing?

Question: Nik Burns - Jarden Limited, Research Division - Analyst : That's great. Look, my other question, I guess, just you mentioned that you see further upside in your share price, probably not too surprising, but from a market perspective, it feels like one of the factors weighing on the share price recently has been the agency report on -- that predicted a gas shortfall this year. Now irrespective of any realism around that shortfall emerging, it does feel like the market is looking for some degree of clarity or certainty around any potential impact on Santos from any rule changes that might come through in the forms of a revised ADGSM HOA. Can you talk about the time frame where we can get sort of that information in the market? So we can all make an assessment about what that potential impact might be.