SANTOS LIMITED — Annual Report 2017

Feb 20, 2018

- Santos 2017 Full year results

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21 February 2018

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Disclaimer and im ortant notice p

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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 United States currency, unless otherwise stated.

EBITDAX (earnings before interest, tax, depreciation, depletion, exploration, evaluation and impairment), EBIT (earnings before interest and tax), underlying profit and free cash flow (operating cash flows less investing cash flows net of acquisitions and disposals) are non-IFRS measures that are presented to provide an understanding of the performance of Santos’ operations. Underlying profit excludes the impacts of asset acquisitions, disposals and impairments, as well as items that are subject to significant variability from one period to the next, including the effects of fair value adjustments and fluctuations in exchange rates. The non-IFRS financial information is unaudited however the numbers have been extracted from the audited financial statements.

This presentation refers to estimates of petroleum reserves contained in Santos’ Annual Report released to the ASX on 21 February 2018 (Annual Reserves Statement). Santos confirms that it is not aware of any new information or data that materially affects the information included in the Annual Reserves Statement and that all the material assumptions and technical parameters underpinning the estimates in the Annual Reserves Statement continue to apply and have not materially changed.

The estimates of petroleum reserves contained in this presentation are as at 31 December 2017. Santos prepares its petroleum reserves estimates in accordance with the Petroleum Resources Management System (PRMS) sponsored by the Society of Petroleum Engineers (SPE). Unless otherwise stated, all references to petroleum reserves quantities in this presentation are Santos’ net share. Reference points for Santos’ petroleum reserves and production are defined points within Santos’ operations where normal exploration and production business ceases, and quantities of produced product are measured under defined conditions prior to custody transfer. Fuel, flare and vent consumed to the reference points are excluded. Petroleum reserves are aggregated by arithmetic summation by category and as a result, proved reserves may be a very conservative estimate due to the portfolio effects of arithmetic summation. Petroleum reserves are typically prepared by deterministic methods with support from probabilistic methods. Petroleum reserves replacement ratio is the ratio of the change in petroleum reserves (excluding production) divided by production. Organic reserves replacement ratio excludes net acquisitions and divestments. Conversion factors: 1PJ of sales gas and ethane equals 171,937 boe; 1 tonne of LPG equals 8.458 boe; 1 barrel of condensate equals 0.935 boe; 1 barrel of crude oil equals 1 boe.

Santos 2017 Full-Year Results

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Turnaround delivered ahead of lan p

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Santos now well-positioned to unlock significant shareholder value and capitalise on a clear strategy to Build and Grow the business

Strengthened the balance sheet Simplified the portfolio Reduced costs and increased efficiencies Advanced significant growth opportunities Embedded a new disciplined operating model Delivered a strong operating performance

     

Santos 2017 Full-Year Results

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2017 Full- ear hi hli hts y g g

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Significant turnaround in business performance

Forecast free cash flow breakeven reduced

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Forecast free cash flow breakeven [1]
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Balance sheet strengthened

Net debt

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36.50
+ $618 million free cash flow 3.5 + Ample liquidity of
32
generated $3.2 billion in cash and
2.7
undrawn bilateral facilities
+ Focus remains on maximising
12% operating cash flow to reduce 22% + Target $2 billion in net debt
debt by the end of 2019
2016 2017 2016 2017 + No final dividend declared
Underlying profit increased Disciplined cost control
Underlying NPAT Upstream unit production cost
336 + Underlying profit $273 million 8.45 8.07 + Cultural shift to lean, focused
higher operations with rigorous cost
control
+ Net loss of $360 million,
433% incorporates previously 4% + Proven cost performance
announced US$689 million supports increasing
63
after-tax net impairment development activity to unlock
2016 2017 2016 2017
US$ per bbl US$ billion
US$ million US$ per boe
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• • Proven cost performance supports increasing development activity to unlock future gas supply

1 Free cash flow breakeven is the average annual oil price in 2017 at which cash flows from operating activities (including hedging) equals cash flows from investing activities. Forecast methodology uses corporate assumptions. Excludes one-off restructuring and redundancy costs, and asset divestitures and acquisitions.

Santos 2017 Full-Year Results

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Stron free cash eneration g g

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$1.4 billion turnaround in free cash generation in two years

Free cash flow[1]

US$ million

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618
206
2016 2017
2015
(739)
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• • 2018 forecast free cash flow breakeven ~$36/bbl[2]
• • includes all 2018 forecast capex
• • Every $10/bbl increment in oil price above free cash flow breakeven increases free cash flow by $250-300 million per annum
• • Priorities for cash allocation
• • Debt repayment
• • Fund exploration
• • Fund growth projects
• • Returns to shareholders

1 Operating cash flows less investing cash flows net of acquisitions and disposals.

2 Free cash flow breakeven is the average annual oil price in 2018 at which cash flows from operating activities (including hedging) equals cash flows from investing activities. Forecast methodology uses corporate assumptions. Excludes one-off restructuring and redundancy costs, and asset divestitures and acquisitions.

Santos 2017 Full-Year Results

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Build & Grow

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Execute and bring on-line growth opportunities across the core portfolio

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BUILD & GROW
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NORTHERN AUSTRALIA

• Barossa field identified as lead candidate for Darwin LNG backfill. FEED targeted for 2Q 2018 + Development study of Petrel-Tern initiated + Crown-Lasseter well positioned for backfill or expansion of existing infrastructure

PNG

QUEENSLAND

• Further debottlenecking of existing PNG LNG plant

• Commercialise uncontracted Eastern Qld gas

• Roma East sanctioned

• • PNG LNG expansion

• Arcadia sanction targeted for 1H 2018

• Western Area farm-in executed. JV alignment continues to strengthen

• Aiming to ramp-up GLNG LNG sales to ~6 mtpa by the end of 2019

COOPER BASIN

NARRABRI

• EIS submitted and approvals process underway

• Expect to drill 70-80 wells in 2018 with 3 rigs to grow production

• Strong inventory build. >100 E&A opportunities identified

• Introduced to core portfolio

• Accelerated exploration and appraisal focus

Santos 2017 Full-Year Results

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Sustainabilit y

SAFETY & ENVIRONMENT

• • Increased focus on process safety and incidents with potential for significant harm
• • Continued focus on compliance to safety critical maintenance activities

• Energy Solutions group evaluating and selecting new technologies to reduce emissions and increase gas supply

CLIMATE CHANGE & SUSTAINABILITY REPORTING

• • Consistently reported our greenhouse gas emissions and sustainability data since 2004
• • Inaugural Climate Change Report consistent with TCFD Guidelines published in February 2018

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LOST TIME INJURY FREQUENCY RATE Three year rolling average (2012 – 2017)

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1.2
1.0
0.8
0.6
0.4
0.2
0.0
2012 2013 2014 2015 2016 2017
rate per million hours worked
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GOVERNANCE, SYSTEMS AND PROCESSES

• • Strong and streamlined governance structures and processes developed in 2017
• • Strengthened risk management processes
• • Increased focus on organisational capability development

Santos 2017 Full-Year Results

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LNG Marketin and Tradin g g

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Santos and ENN Ecological in discussions to establish an LNG trading joint venture

Chinese gas demand

• • Builds on the existing strategic relationship between Santos and ENN
• • The LNG trading joint venture will:
• • focus on the increasing LNG demand across growing Chinese and international markets
• • give both parties increased access to LNG markets
• • provide access to ENN’s Zhoushan import terminal in China
• • ENN is one of the largest natural gas distributors in China. ENN invests in and operates gas pipeline infrastructure, vehicle/ship refuelling stations, and the sales and distribution of pipeline gas and LNG
• • ENN to commission the Zhoushan import terminal (3 mtpa capacity) in 2H of 2018
• • Targeting definitive JV agreement Q2 2018

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mtpa
350
300
250
200
150
100
9% CAGR
50
0
2015 2020 2025
Source: Wood Mackenzie
Production Net Import (Pipe)
Net Import (LNG) Demand
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Santos 2017 Full-Year Results

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Drivin sustainable shareholder value g

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Being a low-cost, reliable and high performance business underpins the significant organic growth options across the core portfolio

• DISCIPLINED CORE LONG-LIFE GAS

• OPERATING MODEL ASSET PORTFOLIO + Core long-life gas assets positioned to provide stable

• Core portfolio free cash flow production, pre-major breakeven at ≤$40/bbl oil growth opportunities price through the oil price + Targeting production growth

• cycle across all core assets

• Each core asset free cash + Major growth opportunities:

• flow positive at ≤$40/bbl, + PNG LNG expansion

• pre-major growth spend + Barossa backfill to Darwin LNG + Narrabri Gas Project

• • Core portfolio free cash flow breakeven at ≤$40/bbl oil price through the oil price cycle
• • Each core asset free cash flow positive at ≤$40/bbl, pre-major growth spend

• MAXIMISE FREE CASH FLOW

• • Priorities for cash allocation + Debt repayment + Fund exploration + Fund growth projects + Returns to shareholders

Santos 2017 Full-Year Results

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Finance & capital management Anthony Neilson CFO

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Financial riorities p

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Significant progress in 2017 on our financial priorities

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REDUCING INCREASING REDUCING DEBT CAPITAL
COSTS FREE CASH FLOW MANAGEMENT
+ EURO 1 billion
Subordinated
+ Free cash flow Notes redeemed
+ Net debt
$618 million and replaced by
+ Unit upstream $2.7 billion $800 million 10-
+ $412 million
production costs + $0.8 billion year Reg-S bond
$8.07 per boe + excludes net cash from asset + Gross debt + Annual interest cost
+ $0.38/boe disposals and $4 billion savings of
acquisitions of >$40 million per
$96 million + $1.6 billion annum
+ $600 million ECA
facility prepayment
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2017 full-year compared to 2016 full-year outcomes

Santos 2017 Full-Year Results

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2017 Full- ear financial sna shot y p

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Underlying profit up 433% to $336 million. Net loss of $360 million incorporates $703 million after tax net impairment ($689 million taken at half-year results)

US$ million	2017	2016	Change
Product sales	3,107	2,594	20%
EBITDAX	1,428	1,199	19%
Underlying profit1	336	63	433%
Net loss after tax	(360)	(1,047)	66%
Operating cash flow	1,248	840	49%
Free cash flow2	618	206	200%
Net debt	2,731	3,492	22%

1 For a reconciliation of 2017 Full-year net loss to underlying profit, refer to Appendix.

2 Operating cash flow less investing cash flows net of acquisitions and disposals.

Santos 2017 Full-Year Results

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Stron free cash flow eneration g g

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Free cash flow up 200% to $618 million continues trend of improving free cash generation

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Operating cash flow Investing cash flow [1] Free cash flow [1]
US$ million US$ million US$ million
618
1,248 2015 2016 2017
206
840 2016 2017
811
(634) (630)
2015
2015 2016 2017 (1,550) (739)
49% 1% 200%
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Santos 2017 Full-Year Results

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1 Excludes acquisitions / divestments

Production and sales volumes

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Core asset production 4% higher. Core asset sales volumes 5% higher

Production volume

mmboe

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61.6
57.7 59.5
2015 2016 2017
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Core assets Other assets

Sales volume

mmboe

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84.1 83.4
64.3
2015 2016 2017
Own product Third party
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• • Core asset production increased 4% to 51.8 mmboe, primarily due to the ramp-up of GLNG
• • Core asset sales volumes 5% higher at 75.7 mmboe due to increased upstream production and third party purchases
• • Production from other assets decreased 35% to 7.7 mmboe primarily due to the sale of the Victorian, Mereenie and Stag assets
• • 2018 full-year guidance maintained at 55-60 mmboe

• Other assets 4 mmboe lower primarily due to asset sales

• • LNG sales volumes up 10% to a record 3.1 million tonnes due to strong performance from PNG LNG and the ramp-up of GLNG

• 2018 full-year guidance maintained at 72-78 mmboe

Santos 2017 Full-Year Results

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Sales revenue

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Sales revenue higher due to higher oil and LNG prices, and higher LNG sales volumes

US$ million	2017 2016 Var
Sales Revenue (incl. third party) Gas, ethane and liquefied gas Crude oil Condensate and naphtha Liquefied petroleum gas	2,205 1,784 24% 579 575 1% 235 183 28% 88 52 69%
Total1	3,107 2,594 20%

• 1 Total product sales include third-party product sales of $926 million (2016: $643 million)

Average realised crude Average realised LNG oil price up 25% price up 21%

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57.85
46.43
2016 2017
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7.31
6.03
2016 2017
US$ per mmbtu
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• • Sales revenue up 20% to $3.1 billion
• • Average realised LNG price up 21% to $7.31/mmbtu
• • Higher average realised oil prices (up 25%) offset lower sales volumes
• • Condensate sales volumes and average prices both higher

2017 sales revenue by asset

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Northern
Australia
4.9% WA Gas
7.8%
Cooper Basin Other
24.3% Oil
Sales gas, 10.9%$579m
ethane and
LNG
Corporate &
Queensland$2,205m Trading
23.5% 11.7%
PNG
16.9%
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Santos 2017 Full-Year Results

Production costs

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Production costs down 8% primarily due to cost saving initiatives

• • Unit upstream production costs down 4% to $8.07/boe

US$ million	2017 2016 Var
Production costs Production cost (US$/boe)	481 520 (8)% 8.07 8.45 (4)%
Other operating costs
LNG plant costs	63 58 9%
Pipeline tariffs, processing tolls & other	181 174 4% (16) 29 (155)%
Onerous contract
Royalty and excise	64 43 49%
Shipping costs	18 22 (18)%
Total other operating costs	310 326 (5)%
Total	791 846 (7)%

• • Cooper Basin down 13% to $9.32/boe
• • Queensland down 8% to $5.92/boe
• • LNG plant costs up primarily due to full-year of GLNG T2 in 2017
• • Onerous contract provision 155% lower due to M&T optimising infrastructure positions and increased utilisation
• • Royalty and excise higher primarily due to higher sales revenue
• • 2018 upstream unit cost guidance maintained at $8.2-8.8/boe
• • Planned shutdown activities at PNG LNG and Moomba
• • Stronger AUD/USD exchange rate is providing upward pressure on AUD costs when translated into USD

Santos 2017 Full-Year Results

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Financial erformance p

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EBITDAX up 19% to $1.4 billion. Underlying NPAT up 433% to $336 million

US$ million	2017 2016 Var
Total revenue/income Production costs Other operating costs Third party product purchases Other1 Foreign exchange (losses)/gains Fair value losses on commodity hedges EBITDAX	3,264 2,747 19% (481) (520) (8)% (310) (326) (5)% (696) (544) 28% (133) (178) (25)% (153) 34 (550)% (63) (14) (350)%
	1,428 1,199 19%
Exploration and evaluation expense	(94) (138) (32)%
Depreciation and depletion	(742) (741) 0%
Impairment losses	(938) (1,561) (40)%
Change in future restoration	31 37 (16)%
EBIT	(315) (1,204) (74)%
Net finance costs	(270) (281) (4)%
Loss before tax	(585) (1,485) (61)%
Tax benefit/(expense)	225 438 (49)%
Loss after tax	(360) (1,047) (66)%
Underlying profit	336 63 433%

• • Revenue up 19% to $3.3 billion due to higher oil and LNG prices, and higher LNG sales volumes
• • Lower production costs primarily due to Cooper Basin cost efficiencies and divestment of non-core assets
• • Higher third party product purchases reflect ramp-up in GLNG demand and higher Santos portfolio volumes
• • Foreign exchange losses in 2017 primarily represent FX movements on revaluations of tax bases which are offset in tax expense, plus FX movements on foreign currency cash balances
• • Fair value losses on commodity hedges represent mark-tomarket valuation of oil hedge contracts at year-end
• • Pre-tax net impairment charge of $938 million primarily due to net impairments taken at half-year

1 Other includes product stock movement, corporate expenses, other expenses and share of profit of joint ventures

Santos 2017 Full-Year Results

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Ca ital ex enditure p p

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Full-year capex $682 million. 2018 capex guidance maintained at $825-875 million

• • Capital expenditure of $682 million

Capital expenditure[1]

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US$ million
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• • includes Muruk acquisition and exploration drilling costs (Exploration)
• • Barossa appraisal drilling (Northern Australia)
• • 2018 capital expenditure guidance maintained at $825-875 million
• • Cooper Basin 3-rig program drilling 70-80 wells
• • GLNG drilling ~250 wells
• • PNG LNG Angore pipeline and surface facilities
• • Northern Australia Bayu-Undan 3-well infill program and Barossa FEED

1 Capital expenditure incurred includes abandonment expenditure but excludes capitalised interest

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1,288
682
625
2015 2016 2017
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2017 Full-year capital expenditure[1]

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PNG
WA Gas
$18m
$37m
Northern
Australia
$55m
Cooper Basin
$199m
Other
$81m
Corporate &
Queensland Exploration
$178m $114m
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Santos 2017 Full-Year Results

Net debt reduced to $2.7 billion

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Target $2 billion in net debt by the end of 2019

• • Net debt reduced to $2.7 billion[1] through a combination of free cash flow, previously announced asset sales and proceeds from the Share Purchase Plan
• • Focus remains on using surplus cash flow for debt reduction
• • Gross debt reduced to $4 billion, down $1.6 billion
• • Annual interest cost savings of >$40 million per annum
• • S&P BBB- (stable) credit rating
• • Liquidity of $3.2 billion[1]
• • $1.2 billion in cash
• • $2 billion in undrawn bi-lateral bank debt facilities

Movement in net debt to 31 December 2017

$ million

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3,492
(96)
630 102
2,731
(149)
(1,248)
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Opening net Net cash Operating Investing Share Other non Closing net debt (31 Dec from asset cash flow cash flow Purchase cash debt (31 Dec 2016) disposals Plan 2017) and acquisitions

1 As at 31 December 2017

Santos 2017 Full-Year Results

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Drawn debt maturit rofile y p

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Euro hybrid redeemed and replaced with more efficient long-term debt funding. Early repayment of $600 million 2019 ECA supported loan facility occurred in 2017

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Drawn debt maturity profile as at Breakdown of drawn debt
31 December 2017 [1] facilities as at 31 December 2017 [1]
$million
1,200
972
900
815
Senior unsecured
58%
600
490 PNG LNG
project
finance (non-
317
289 recourse)
300 219 209 244 253 42%
124
0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 + Weighted average term to
Long-term notes ECA supported loan facilities maturity ~5 years
PNG LNG project finance Reg-S Bond
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Drawn debt maturity profile excluding
PNG LNG as at 31 December 2017 [1]
$million
1,200
900
808 815
600
300 277
64 60 62 68 70 18 -
0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Long-term notes ECA supported loan facilities Reg-S Bond
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¹ Excludes finance leases and derivatives.

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Santos 2017 Full-Year Results

Summar y

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In 2018 the focus remains on reducing costs, increasing free cash flow, reducing debt and disciplined capital management

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REDUCING INCREASING REDUCING DEBT CAPITAL
COSTS FREE CASH FLOW MANAGEMENT
+ Forecast 2018 group
+ Cost out continuing free cash flow + Capital management
+ Target $2 billion in
in 2018 for core and breakeven expected strategy in place and
net debt by the end
non-core assets to be ~$36/bbl oil continues to target
of 2019
price efficient debt
+ Lower cost base
+ Further gross debt funding
allows increase in + Disciplined model,
reduction through
activity to build and all core assets free + Prudent oil price
free cash flow
grow the business cash flow breakeven hedging
≤$40/bbl oil price
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Santos 2017 Full-Year Results

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Operations review Kevin Gallagher Managing Director & CEO

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Northern Australia

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Three significant multi-Tcf resource hubs well positioned for backfill or expansion of existing infrastructure

+ Bonaparte Basin

• • Two-well appraisal campaign strengthened Barossa (Santos 25%) as lead candidate for Darwin LNG backfill
• • Significant increase in resource size
• • Brownfield development leveraging existing infrastructure
• • FEED targeted for Q2 2018 and FID in late 2019
• • Development study of Petrel-Tern initiated (Santos 35-40%)

+ Browse Basin

• • Retention leases secured over Crown-Lasseter fields (Santos 30% and operator); well positioned for backfill or expansion of existing infrastructure
• • Evaluating monetisation opportunities
• • Material exploration inventory

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Barossa
Caldita
Bayu-Undan
Darwin LNG Icthys
Petrel LNG
Tern
Crown
Prelude
Lasseter Blacktip
Icthys CPF
Wadeye gas plant
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Santos 2017 Full-Year Results

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Northern Australia

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Strong Darwin LNG performance and successful Barossa appraisal campaign

• • Darwin LNG continues to achieve excellent reliability and availability (Santos 11.5%)
• • 51 LNG cargoes shipped in 2017 + 3.3 million tonnes of LNG produced
• • Bayu-Undan in-fill program expected to deliver first gas in Q4 2018
• • EBITDAX in-line with prior year
• • Capex higher due to successful Barossa two-well appraisal campaign

Asset KPIs	2017	2016
Production (mmboe)	4.0	4.2
Sales volume (mmboe)	4.0	4.2
Revenue (US$m)	153	145
Production cost (US$/boe)	18.95	17.58
EBITDAX (US$m)	87	86
Capex (US$m)	55	14

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EBITDAX
86 87
1%
US$ million 2016 2017
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Santos 2017 Full-Year Results

PNG

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Well-positioned to participate in PNG LNG expansion

+ Muruk appraisal, 21 kilometres from Hides

• • Multi-Tcf contingent resource potential; excellent reservoir quality and flow rates
• • Seismic acquisition over Muruk and adjacent Karoma prospect
• • Muruk 2 appraisal well expected to spud Q2 2018

+ Western area farm-in announced Q4 2017 (Santos 20%)[1]

• • Exploration position aligned along the Hides-P’nyang trend with JV partners ExxonMobil and Oil Search
• • Aure Fold Belt farm-in announced Q4 2017 (Santos 20%)[1] , southeast of the Elk/Antelope fields
• • Barikewa appraisal (Santos 40%), 5 kilometres from PNG LNG sales gas pipeline
• • Barikewa 3 appraisal well expected to spud in 2018

1 Subject to conditions precedent including Government approval

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Western area farm-in
P’nyang
Muruk & Karoma
Juha Hides
Angore
Kutubu
Aure farm-in
Barikewa
Pandora PNG LNG plant
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Santos 2017 Full-Year Results

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PNG

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Record PNG LNG performance

• • EBITDAX 23% higher due to higher LNG prices, strong operating performance and lower unit costs
• • 110 LNG cargoes shipped in 2017
• • PNG LNG maximum day rate of 8.9 mtpa achieved, 30% above nameplate capacity (Santos 13.5%)
• • Further debottlenecking opportunities
• • Continue to work with partners to align interests to support expansion opportunities
• • PNG LNG reserves upgrade due to continued strong Hides field performance, including an upgraded condensate forecast, and improved LNG plant performance

	Asset KPIs	2017	2016
	Production (mmboe)	12.6	12.2
	Sales volume (mmboe)	12.0	11.8
	Revenue (US$m)	532	444
	Production cost (US$/boe)	4.37	4.59
	EBITDAX (US$m)	430	350
	Capex (US$m)	18	8

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EBITDAX
430
350
23%
US$ million 2016 2017
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Santos 2017 Full-Year Results

Onshore East Coast Australia

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Australia’s lowest-cost onshore operations set to benefit from supplying domestic and export markets

• • Sustainable structural cost reductions now embedded
• • Lower Cooper Basin costs and increased exploration expected to deliver reserves additions over time
• • 2018 drilling activity expected to increase
• • 70-80 wells in the Cooper Basin
• • ~250 wells in GLNG
• • Expect to supply ~70 PJ into the East Coast domestic market in 2018
• • Medium-term growth opportunities as a result of large uncontracted Eastern Queensland gas reserves

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Queensland
+ GLNG
+ Eastern Qld
Wallumbilla
Moomba
Cooper Basin
Narrabri
Gas Project
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• • Strategic infrastructure position and gas storage
• • Narrabri introduced to core portfolio

Santos 2017 Full-Year Results

27

Queensland[1]

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Stronger asset performance due to ramp-up of GLNG and lower costs

+ EBITDAX 72% higher due to increased upstream production, higher third-party volumes, lower cost operations and higher LNG prices + Unit production costs down 8% to $5.92/boe + Lowest cost onshore operator in Queensland + Roma drill-complete-connect well costs down 44% to $0.9 million + GLNG produced 5.2 million tonnes of LNG in 2017 with 89 cargoes shipped + Roma 2B and 3A projects complete, Scotia CF1 project >70% complete and ahead of schedule + Roma East development drilling commenced + Progressing Arcadia development toward sanction by end of 1H 2018 + Agreements executed to evacuate uncontracted Eastern	Asset KPIs 2017 2016	Asset KPIs 2017 2016
	Production (mmboe) 11.5 9.5 Sales volume (mmboe) 22.7 19.2
	Revenue (US$m) 764 540
	Production cost (US$/boe) 5.92 6.44
	EBITDAX (US$m) 329 191
	Capex (US$m) 178 228
	US$ million	EBITDAX 191 2016 2017 329 72%

• • Agreements executed to evacuate uncontracted Eastern Queensland gas

1 Queensland asset segment was previously called GLNG. The assets included in the segment are unchanged and include the GLNG Joint Venture plus Santos’ non-operated interests in Combabula, Ramyard, Spring Gully and Denison.

28

Santos 2017 Full-Year Results

Coo er Basin p

==> picture [70 x 19] intentionally omitted <==

Transformed to low-cost, efficient drill-complete-connect operations

• • EBITDAX 27% higher due to lower cost operations, improved productivity and higher oil prices
• • Improved drilling cycle times have led to embedded and sustainable cost reductions
• • Drill-stimulate-complete gas well costs down 33% to $2.8 million
• • Unit production costs down 13% to US$9.32/boe + Lower costs and renewed exploration focus expected to lead to reserves additions over time
• • 5 mmboe increase in 2P reserves before production in 2017
• • Significant progress in identifying new potential growth prospects
• • Moomba South renewed exploration and appraisal focus

Asset KPIs 2017 2016	Asset KPIs 2017 2016
Production (mmboe) 14.4 15.1 Sales volume (mmboe) 21.0 23.5
Revenue (US$m) 833 768
Production cost (US$/boe) 9.32 10.71
EBITDAX (US$m) 328 258
Capex (US$m) 199 173
US$ million	EBITDAX 258 2016 2017 328 27%

29

Santos 2017 Full-Year Results

Coo er Basin Growth – Moomba South p

==> picture [70 x 19] intentionally omitted <==

Renewed exploration and appraisal focus in underexplored areas beneath a mature field. Significant resource potential adjacent to Moomba Plant

• • Thick gas-saturated Patchawarra sequence intersected but not developed in historical wells
• • Moomba 212 success in 2016 reinvigorates Moomba flank play in underexplored areas of the mature field
• • Ongoing appraisal success will enable maturation to reserves
• • Low execution costs are an enabler

LOWER PATCHAWARRA VC50 DEPTH STRUCTURE

==> picture [210 x 243] intentionally omitted <==

----- Start of picture text -----

MOOMBA
PLANT
M212
A
A’
POTENTIAL
APPRAISAL
LOCATIONS
PATCHAWARRA
PENETRATIONS
----- End of picture text -----

==> picture [160 x 248] intentionally omitted <==

----- Start of picture text -----

A A’
M212 PRODUCING ZONES
ONLAPPING
PATCHAWARRA PLAY
----- End of picture text -----

30

Santos 2017 Full-Year Results

Western Australia Gas

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Low cost operations with capacity and reserves to meet short and long-term demand

+	Higher production, sales volumes and revenues
+	Low-cost, high margin conventional domestic gas assets
	generating strong free cash flow

+	Low-cost, high margin conventional domestic gas assets generating strong free cash flow	Low-cost, high margin conventional domestic gas assets generating strong free cash flow
+	Positive market fundamentals
	+	Supply deficit emerging from early 2020s
	+	Expected that ~50% (1,000 PJ) of forecast market demand needs to be
		re-contracted during 2019-24
	+	Santos has significant uncontracted 2P reserves
	+	Signed two new gas sales agreements with Wesfarmers commencing in
		2018

Asset KPIs 2017 2016	Asset KPIs 2017 2016
Production (mmboe) 9.2 8.9 Sales volume (mmboe) 9.4 8.8
Revenue (US$m) 262 184
Production cost (US$/boe) 5.82 5.11
EBITDAX (US$m) 201 206
Capex (US$m) 37 24
US$ million	EBITDAX 206 2016 2017 201 2%

31

Santos 2017 Full-Year Results

Other assets

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Packaged and run separately for value as a standalone business. Portfolio to be continually optimised to realise value

• • Strong performance from Asian assets
• • EBITDAX $177 million
• • Continued strong free cash generation from production of 6.1 mmboe
• • Cost reductions through operating efficiencies and moving to unmanned offshore operations in the Sampang PSC
• • 7 mmboe 2P reserves increase (>100% RRR)

Asset KPIs	2017	2016
Production (mmboe)	7.7	11.8
Sales volume (mmboe)	7.7	11.7
Revenue (US$m)	346	411
Production cost (US$/boe)	15.91	14.06
EBITDAX (US$m) Capex (US$m)	223 81	246 84

• • Production and sales volumes from Australian non-core assets lower primarily due to the sale of the Victorian, Mereenie and Stag assets

EBITDAX

==> picture [182 x 95] intentionally omitted <==

----- Start of picture text -----

246
223
9%
US$ million 2016 2017
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32

Santos 2017 Full-Year Results

2018 strate ic riorities g p

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Business focus aligned with the core strategy

Focus on business improvement and operational efficiencies to further reduce costs and maximise operating cash flow

Disciplined allocation of free cash to repay debt and build production levels across core assets

Disciplined exploration and appraisal around core assets

Progress major growth opportunities in core assets

Strengthen and develop Santos’ high-performance culture

Santos 2017 Full-Year Results

33

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Appendix

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Reserves

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• 1P reserves increased by 44 mmboe before production (90% organic RRR) 2P reserves increased by 19 mmboe before production (62% organic RRR)

• • Improving trend of 2P organic reserve replacement
• • Developed 2P reserves increased to 57% of total 2P reserves (from 51% in 2016)
• • Reserve upgrades in PNG, Asia, Cooper Basin and WA Gas before 2017 production

2P organic reserve replacement ratio (RRR) %

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----- Start of picture text -----

100
62%
50
19%
2017
0%
0
2015 2016 2017
----- End of picture text -----

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----- Start of picture text -----

2P reserves
mmboe
----- End of picture text -----

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----- Start of picture text -----

848
Other
WA Gas
Northern
Australia
PNG
Queensland
Cooper Basin
2017
----- End of picture text -----

Santos 2017 Full-Year Results

35

Si nificant items g

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Reconciliation of full-year net loss to underlying profit

US$million 2017 2016	US$million 2017 2016	US$million 2017 2016
Net profit/(loss) after tax	(360)	(1,047)
Add/(deduct) significant items after tax
Impairment losses	703	1,101
Net gains on asset sales	(59)	(17)
Other items	52	26
Underlying profit	336	63

Santos 2017 Full-Year Results

36

Li uidit and net debt as at 31 December 2017 q y

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$3.2 billion in cash and committed undrawn debt facilities

Liquidity (US$million)	Liquidity (US$million)	31 Dec 2017	31 Dec 2016
Cash		1,231	2,026
Undrawn bilateral bank debt facilities		2,020	2,313
Total liquidity		3,251	4,339
Debt (US$million)
Export credit agency supported loan facilities	Senior, unsecured	1,057	1,734
US Private Placement	Senior, unsecured	424	619
Reg-S bond	Senior, unsecured	783	-
PNG LNG project finance	Non-recourse, secured	1,616	1,749
Euro-denominated hybrid notes	Subordinated	-	1,049
Other	Finance leases and derivatives	82	367
Total debt		3,962	5,518
Santos 2017 Full-Year Results Total net debt		2,731	37 3,492

2017 Full- ear se ment results summar y g y

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2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2017 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total
Revenue	833	764	532	153	262	346	282	3,172
Production costs	(134)	(68)	(55)	(75)	(54)	(123)	28	(481)
Other operating costs	(88)	(73)	(46)	-	(20)	(13)	(70)	(310)
Third party product purchases	(200)	(275)	(1)	-	-	-	(220)	(696)
Inter-segment purchases	(1)	(34)	-	-	-	-	35	-
Product stock movement	(58)	23	1	1	(4)	(3)	(5)	(45)
Other income	-	1	2	-	34	43	12	92
Other expenses	(21)	(4)	(3)	(3)	(17)	(26)	(88)	(162)
FX gains and losses	(3)	(5)	-	-	-	(1)	(144)	(153)
Share of profit of joint ventures	-	-	-	11	-	-	-	11
EBITDAX	328	329	430	87	201	223	(170)	1,428

Santos 2017 Full-Year Results

38

2016 Full- ear se ment results summar y g y

==> picture [70 x 19] intentionally omitted <==

2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total	2016 US$million Cooper Basin QLD PNG Northern Australia WA Gas Other Assets Corporate explor’n & elimins Total
Revenue	768	540	444	145	184	411	135	2,627
Production costs	(160)	(61)	(56)	(73)	(46)	(166)	42	(520)
Other operating costs	(77)	(74)	(38)	-	(5)	(16)	(116)	(326)
Third party product purchases	(201)	(142)	(1)	-	-	(3)	(197)	(544)
Inter-segment purchases	(18)	(75)	-	-	-	-	93	-
Product stock movement	(11)	(12)	-	-	3	-	(7)	(27)
Other income	1	14	2	8	73	39	(17)	120
Other expenses	(44)	(8)	(1)	(4)	(6)	(16)	(96)	(175)
FX gains and losses	-	9	-	-	3	(3)	25	34
Share of profit of joint ventures	-	-	-	10	-	-	-	10
EBITDAX	258	191	350	86	206	246	(138)	1,199

Santos 2017 Full-Year Results

39

2018 Guidance

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2018 guidance maintained

2018 Guidance	2018 Guidance
Sales volumes	72-78 mmboe
Production	55-60 mmboe
Upstream production costs	US$8.2-8.8/boe
DD&A	US$725-775 million
Capital expenditure	US$825-875 million

Capital expenditure guidance includes abandonment expenditure but excludes capitalised interest.

• • Production and sales guidance maintained

+ Upstream unit cost guidance maintained at $8.2-8.8/boe

• • Higher costs due to planned DLNG/Bayu-Undan shutdown
• • Lower production from PNG LNG and Moomba major shutdowns
• • Lower production from non-core assets
• • Stronger AUD/USD exchange rate is providing upward pressure on AUD costs when translated into USD
• • DD&A US$725-775 million
• • Capital expenditure guidance maintained

Santos 2017 Full-Year Results

40

Im airment p

==> picture [70 x 19] intentionally omitted <==

Net impairment of $703 million after tax taken in 2017, primarily due to lower oil prices

• • In determining the carrying value of its assets, Santos considers a range of asset and macro assumptions, including oil price, exchange rates, discount rates, production and costs

Brent US$ oil price	Dec
assumptions	2017
2018	55
2019	60
2020	65
2021	70
2022	771
2023+	791

• 1 US$70/bbl long-term (2017 real) from 2022

Previously announced impairments taken at 2017 halfyear: GLNG: net impairment of $867 million

• • as a result of the changes in assumptions, predominantly lower US$ oil prices

Cooper Basin: positive net write-back of $336 million

• • lower assumed costs and higher assumed development activity and production, supported by significant improvements in drill, stimulate and connect unit cost performance, partially offset by lower US$ oil prices

AAL: net impairment of $149 million

• • lower US$ oil prices

Impairments taken at 2017 full-year:

Other assets: net impairment of $14 million

Santos 2017 Full-Year Results

41

Oil rice hed in p g g

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Oil price hedging provides protection to oil price downside

Open oil price positions	2018	2019
Zero-cost three-way collars (barrels) Brent short call price ($/bbl) Brent long put price ($/bbl) Brent short put price ($/bbl) Zero-cost collars (barrels) Brent long put price ($/bbl)	11,439,500 US$60.30 US$48.48 US$40.80 - -	- - - - 3,431,000 US$45.00
Brent short call price ($/bbl)	-	US$79.27

2018 Zero-cost three-way collar hedge

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----- Start of picture text -----

$70 Short call
US$60.30
$60 Long put
Short put US$48.48
$50 US$40.80
$40
$30 Realise
Realise Brent Realise Brent Realise US$60.30
plus US$7.68 US$48.48 price
$20
$20 $30 $40.80 $41 $48.48 $48 $60.30 $60 $70 $80
Brent (US$/bbl)
Realised Price (US$/bbl)
----- End of picture text -----

As at 21 February 2018

Santos 2017 Full-Year Results

42