SANTOS LIMITED — Capital/Financing Update 2015

Nov 8, 2015

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Santos Limited (Santos)

ABN

80 007 550 923

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Fully paid ordinary shares (Shares)

2 Number of +securities issued or to be issued (if known) or maximum number which may be issued

Santos will issue 654,106,623 Shares (Entitlement Offer Shares) pursuant to a fully underwritten pro-rata accelerated renounceable entitlement offer as detailed in the announcement dated Monday, 9 November 2015 (Entitlement Offer). The final number of Entitlement Offer Shares issued, and the split between the institutional component and the retail component of the Entitlement Offer remains subject to reconciliation of shareholders' holdings and rounding.

Santos will also issue 73,529,412 Shares (Placement Shares) pursuant to a placement as detailed in the announcement dated Monday, 9 November 2015 (Placement).

+ See chapter 19 for defined terms.

3	Principaltermsofthe+securities(e.g.ifoptions,exercise price and expiry date; if+securities,partlypaidtheamount outstanding and duedatesforpayment;if+convertiblesecurities,theconversion price and dates for	Fully paid ordinary shares
	conversion)
4	Do the +securities rank equallyin all respects from the +issuedate with an existing +class ofquoted +securities?	Fromtheirrespectiveissuedates,theEntitlement Offer Shares and the PlacementShares will rank equally in all respects with theexisting fully paid ordinary shares in Santos.
	If the additional +securities donot rank equally, please state:the date from which they dothe extent to which theyparticipateforthenextdividend, (in the case of atrust,distribution)orinterest paymentthe extent to which they donot rank equally, other thaninrelationtothenextdividend,distributionorinterest payment
5	Issue price or consideration	$3.85 per Entitlement Offer Share
		$6.80 per Placement Share
6	Purpose of the issue(If issued as consideration forthe acquisition of assets, clearlyidentify those assets)	The net proceeds of the Entitlement Offer andPlacement will be used for generalcorporatepurposes, including the repayment of debt.
6a	Is the entity an +eligible entitythathasobtainedsecurityholder approval under rule 7.1A?	N/A
	If Yes, complete sections 6b – 6h
	in relation to the +securities thesubject of this Appendix 3B, andcomply with section 6i

+ See chapter 19 for defined terms.

• 6b The date the security holder resolution under rule 7.1A was passed
• 6c Number of +securities issued without security holder approval under rule 7.1
• 6d Number of +securities issued with security holder approval under rule 7.1A
• 6e Number of +securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of +securities issued under an exception in rule 7.2
• 6g If +securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation.
• 6h If +securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements
• 6i Calculate the entity's remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

+ See chapter 19 for defined terms.

7	+Issue dates	Theissuedateundertheinstitutional
	Note: The issue date may beprescribed by ASX (refer to thedefinition of issue date in rule19.12).For example, the issuedate for a pro rata entitlementissue must comply with theapplicabletimetableinAppendix 7A.Crossreference:item33ofAppendix 3B.	component of the Entitlement Offer is scheduledfor Friday, 20 November 2015. The issue dateunder the retail component of the EntitlementOffer is scheduled for Thursday, 10 December2015.The issue date under the Placement is Tuesday,10 November 2015.

8 Number and +class of all +securities quoted on ASX (including the +securities in section 2 if applicable)

9	Number	and	+class	of	all
	+securities not quoted on ASX
	(including	the	+securities		in
	section 2 if applicable)

Number	+Class
1,765,414,803,whichincludes Shares to beissuedundertheEntitlement Offer andthe Placement.	Fullypaidordinaryshares

Number	+Class
12,500	Executive share plan '0'shares of 25 cents eachpaid to 1 cent.
12,500	Executive share plan '2'shares of 25 cents eachpaid to 1 cent.
8,251,510	Share AcquisitionRights issued pursuantto the SantosEmployee EquityIncentive Plan (SEEIP).
3,922,588	Executive optionsissued pursuant to theSantos Executive ShareOption Plan.
512,594	Fully paid ordinaryshares issued pursuantto the vesting of SARs.
19,775	Fully paid ordinaryshares issued pursuantto the Non-ExecutiveDirector Share Plan.
Nil	Fully paid ordinaryshares issued pursuant

+ See chapter 19 for defined terms.

	to the ShareMatchPlan.
1,635,644	Share AcquisitionRights issued pursuantto the ShareMatchPlan.
10,321	Fully paid ordinaryshares issued pursuantto the ESG EmployeeIncentive Plan.
110,994	Fully paid ordinaryshares issued pursuantto the vesting ofShareMatch.
19,395	Fully paid ordinaryshares issued pursuantto the vesting of SARs.

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Same dividend entitlements as apply to existing ordinary shares in Santos.

Part 2 - Pro rata issue

11	Issecurityholderapprovalrequired?	No
12	Is the issue renounceable or nonrenounceable?	Renounceable
13	Ratio in which the +securitieswill be offered	1newShares for every 1.7existing ordinaryshares in Santos held at the record date
14	+Class of +securities to which theoffer relates	Fully paid ordinary shares
15	+Recorddatetodetermineentitlements	7:00pm(Sydneytime)onThursday,12November 2015
16	Willholdingsondifferentregisters(orsubregisters)beaggregatedforcalculatingentitlements?	No

+ See chapter 19 for defined terms.

17	Policy for deciding entitlementsin relation to fractions	Any fractions arising in the calculation ofentitlements will be rounded up to the nearestwhole number of new Shares.
18	Names of countries in which theentity has security holders whowillnotbesentnewofferdocumentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.	FortheinstitutionalcomponentoftheEntitlement Offer, all countries other thanAustralia, British Virgin Islands, Canada (BritishColumbia,OntarioandQuebec),China,Belgium,Denmark,Germany,Luxembourg,Netherlands, France, Hong Kong, Ireland, Italy,Japan, Korea, Malaysia, New Zealand, Norway,Singapore, South Africa, Sweden, Switzerland,UAE (excluding Dubai International FinancialCentre), United Kingdom, United States, andany other jurisdictions agreed by Santos and theLead Manager.For the retail component of the EntitlementOffer, all countries other than Australia andNew Zealand.
19	Closingdateforreceiptofacceptances or renunciations	The institutional component of the EntitlementOffer is scheduled to closeon Tuesday, 10November 2015.The retail component of the Entitlement Offeris scheduled to close at 5:00pm (Sydney time)
		on Monday, 30 November 2015.
20	Names of any underwriters	Deutsche Bank AG, Sydney Branch (DeutscheBank), Citigroup Global Markets Australia PtyLimited and UBS AG, Australian Branch

+ See chapter 19 for defined terms.

21	Amount of any underwriting feeor commission	Santos has agreed to pay each of DeutscheBank, Citigroup Global Markets Australia PtyLimited and UBS AG, Australian Branch(aslead managers, underwriters and bookrunners)one third of each of the following fees: (A) inrelation to the institutional component of theEntitlement Offer, an underwriting fee of 1.4%of the institutional offer proceeds (excludingGST) and a management and arranging fee of0.25%oftheinstitutionalofferproceeds(excluding GST)less the proceeds receivedpursuant to the Placement (both payable on theinstitutional offer settlement date); and (B) inrelationtotheretailcomponentoftheEntitlement Offer, an underwriting fee of 1.4%and a management and selling fee of 0.25% oftheretailofferproceeds(excludingGST)(payable on the retail offer settlement date).In addition, Deutsche Bank will receiveastructuring fee of 0.15% (excluding GST) of thegross subscription monies raised under theEntitlement Offer.Inaddition,Santosmay,initsabsolutediscretion, consider paying the underwriters inaggregate an incentive fee of up to 0.10% of thegross subscription monies raised under theEntitlement Offer.
22	Names of any brokers to theissue	N/A
23	Fee or commission payable tothe broker to the issue	N/A
24	Amountofanyhandlingfeepayable to brokers who lodgeacceptances or renunciations onbehalf of security holders	0.75% with a minimum of $50 and maximum of$250 per security holder.
25	If the issue is contingent onsecurity holders' approval, thedate of the meeting	N/A
26	Date entitlement and acceptance	No prospectus or product disclosure statement

form and offer documents will be sent to persons entitled

is being prepared. An investor presentation has been provided to the ASX with this Appendix 3B.

A Retail Offer Booklet and Entitlement and Acceptance Form will be sent to eligible retail shareholders on Wednesday, 18 November 2015.

+ See chapter 19 for defined terms.

27	If the entity has issued options,and the terms entitle optionholderstoparticipateonexercise,thedateonwhichnotices will be sent to optionholders	N/A
28	Date rights trading will begin (ifapplicable)	Thursday, 12 November 2015 (on a deferredsettlement basis)Thursday, 19 November 2015 (on a normalsettlement basis)
29	Date rights trading will end (ifapplicable)	Monday, 23 November 2015
30	How do security holders selltheir entitlements in full througha broker?	Eligible retail shareholders who want to selltheir entitlements in full on ASX through abroker can do so by instructing their brokerpersonally and providing details as requested inthe Entitlement and Acceptance Form.All ASX sales of entitlements must be made byclose of the retail entitlement trading period,which is scheduled to be Monday, 23 November2015.
31	How do security holders sell partof their entitlements through abrokerandacceptforthebalance?	Eligible retail shareholders who want to sellpart of their entitlements through a broker andaccept for the balance must:in respect of the part of their entitlementbeing taken up, complete and return theEntitlement and Acceptance Form to theRegistrywiththerequiredApplicationMonies (being the issue price multiplied bythe number of new Shares applied for) or viaBPAY by following the instructions set outin the Entitlement and Acceptance Form;andin respect of the entitlements to be sold,instruct their broker personally and providedetails as requested from the Entitlementand Acceptance Form.All sales on ASX of eligible retail shareholderentitlements must be effected by close of theretail entitlement trading period, which isscheduled to be Monday, 23 November 2015.
32	How do security holders disposeof their entitlements (except bysale through a broker)?	Eligible retail shareholders participating in theretail component of the Entitlement Offer whowish to transfer all or part of their entitlement

+ See chapter 19 for defined terms.

		to another person other than on ASX (providedthat the purchaser has an address in Australiaor New Zealand and is not in the United Statesor acting for the account or benefit of a personin the United States) must send a completedRenunciation and Transfer Form to the SantosShare Registry. If the transferee wishes to takeup all or part of the entitlement transferred tothem they must send their Application Moniestogether with the Entitlement and AcceptanceForm related to the entitlement transferred tothem to the Registry.RenunciationandTransferFormscanbeobtained through the Offer Information Line orfrom a stockbroker.The Renunciation and Transfer Form as well as
		the transferee's Application Monies and theEntitlement and Acceptance Form related tothe entitlement transferred must be received bythe Registry no later than 5:00pm (Sydney time)on Monday, 30 November 2015.
33	+Issuedate	The issue date under the Placement is Tuesday,10 November 2015.
		TheissuedateundertheinstitutionalcomponentoftheEntitlementOfferisscheduled for Friday, 20 November 2015.
		The issue date under the retail component oftheEntitlementOfferisscheduledforWednesday, 9 December 2015.

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of +securities (tick one) (a) +Securities described in Part 1 (b) All other +securities Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

+ See chapter 19 for defined terms.

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the +securities are +equity securities, the names of the 20 largest holders of the additional +securities, and the number and percentage of additional +securities held by those holders

36 If the +securities are +equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

37 A copy of any trust deed for the additional +securities

Entities that have ticked box 34(b)

38	Number of +securities for which+quotation is sought	N/A
39	+Class of +securities for whichquotation is sought	N/A
40	Do the +securities rank equally inall respects from the +issue datewith an existing +class of quoted+securities?If the additional +securities donot rank equally, please state:the date from which they dotheextenttowhichtheyparticipateforthenextdividend, (in the case of atrust, distribution) or interestpaymentthe extent to which they donot rank equally, other than inrelation to the next dividend,distributionorinterestpayment	N/A

+ See chapter 19 for defined terms.

41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period N/A

(if issued upon conversion of another +security, clearly identify that other +security)

Number	+Class
N/A	N/A

42 Number and +class of all +securities quoted on ASX (including the +securities in clause 38)

+ See chapter 19 for defined terms.

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX's absolute discretion. ASX may quote the +securities on any conditions it decides.
• 2 We warrant the following to ASX.
  • The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.
  • There is no reason why those +securities should not be granted +quotation.
  • An offer of the + securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.
• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.
• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here:	Date: 9 November 2015(Company secretary)
Print name:	David Lim

== == == == ==

+ See chapter 19 for defined terms.