SANTOS LIMITED — Capital/Financing Update 2015

Apr 19, 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

ABN 80 007 550 923

ASX: STO

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	Share Acquisition Rights (SARs) grantedpursuant to the Santos Employee EquityIncentive Plan (SEEIP).
2	Number of securities issued or to be issued (ifknown) or maximum number which may beissued	2,652,424 SARs, each being a conditionalentitlement to receive 1 fully paid ordinaryshare in the capital of the Company, subjectto the satisfaction of performance conditions.
3	Principal terms of the securities (eg. if options,exercise price and expiry date; if partly paidsecurities, the amount outstanding and duedates for payment; if convertible securities, theconversion price and dates for conversion)	Refer Annexure A.
4	Do the securities rank equally in all respectsfrom the issue date with an existing class ofquoted securities?If the additional securities do not rank equally,please state:the date from which they dothe extent to which they participate for thenext dividend, (in the case of a trust,distribution) or interest paymentthe extent to which they do not rank equally,other than in relation to the next dividend,distribution or interest payment	Shares allocated on vesting of SARs will rankequally with other fully paid ordinary shares.

5	Issue price or consideration	Issued at no cost upon grant.
6	Purpose of the issue(If issued as consideration for the acquisition ofassets, clearly identify those assets)	Issue of SARs pursuant to the terms of theSantos Employee Equity Incentive Plan (SEEIP).
6a	Is the entity an eligible entity that has obtainedsecurity holder approval under rule 7.1A?If Yes, complete sections 6b – 6h in relation tothe securities the subject of this Appendix 3B,
6b	and comply with section 6iThe date the security holder resolution underrule 7.1A was passed
6c	Number of securities issued without securityholder approval under rule 7.1
6d	Number of securities issued with security holderapproval under rule 7.1A
6e	Number of securities issued with security holderapproval under rule 7.3, or another specificsecurity holder approval (specify date ofmeeting)
6f	Number of securities issued under an exceptionin rule 7.2
6g	If securities issued under rule 7.1A, was issueprice at least 75% of 15 day VWAP ascalculated under rule 7.1A.3? Include the issuedate and both values. Include the source of theVWAP calculation.
6h	If securities were issued under rule 7.1A fornon-cash consideration, state date on whichvaluation of consideration was released to ASXMarket Announcements
6i	Calculate the entity's remaining issue capacityunder rule 7.1 and rule 7.1A – completeAnnexure 1 and release to ASX MarketAnnouncements
7	Issue DatesNote: The issue date may be prescribed by ASX (refer to thedefinition of issue date in rule 19.12). For example, theissue date for a pro rata entitlement issue must comply withthe applicable timetable in Appendix 7A.Cross reference: item 33 of Appendix 3B.	20 April 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
1,002,300,038	Fully paid ordinary shares
Number	Class
21,500	Executive share plan '0'shares of 25 cents eachpaid to 1 cent.
21,500	Executive share plan '2'shares of 25 cents eachpaid to 1 cent.
8,085,451	Share Acquisition Rightsissued pursuant to theSantos Employee EquityIncentive Plan (SEEIP).
3,992,038	Executive options issuedpursuant to the SantosExecutive Share OptionPlan.
659,791	Fully paid ordinary sharesissued pursuant to thevesting of SARs.
43,919	Fully paid ordinary sharesissued pursuant to theNon-Executive DirectorShare Plan.
388,938	Fully paid ordinary sharesissued pursuant to theShareMatch Plan.
1,237,567	Share Acquisition Rightsissued pursuant to theShareMatch Plan.
24,083	Fully paid ordinary sharesissued pursuant to theESG Employee IncentivePlan.
92,254	Fully paid ordinary sharesissued pursuant to thevesting of ShareMatch.
26,536	Fully paid ordinary sharesIssued pursuant to thevesting of SARs.

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

If the relevant performance conditions are satisfied the SARs vest and ordinary shares in the Company will be allocated and will thereafter rank equally with other fully paid ordinary shares.

Part 2 – Bonus issue or pro rata issue

• 11 Is security holder approval required? 12 Is the issue renounceable or non-renounceable? 13 Ratio in which the securities will be offered 14 Class of securities to which the offer relates 15 Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference : Rule 7.7 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue
• 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders

25 If the issue is contingent on security holders' approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements in full through a broker? 31 How do security holders sell part of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 Issue date

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)

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

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

100,001 and over

39 Class of securities for which quotation is sought

40 Do the securities rank equally in all respects from the issue date with an existing class of quoted securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

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

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

43 Number and class of all securities not quoted on ASX

Number	Class
Number	Class

Quotation Agreement

• 1. Quotation of our additional securities is in ASX's absolute discretion. ASX may quote the securities on any conditions it decides.
• 1. 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.
• 1. We will indemnity the 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.
• 1. We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before quotation of the securities begins. We acknowledge that ASX is relying on this information and documents. We warrant that they are (will be) true and complete.

Company Secretary

Sign here: Date: 20 April 2014

Print name: DAVID THUAN JIN LIM

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

ANNEXURE A

Number of SARs	2,652,424
Issue price	Nil
Principal terms	The performance condition will be divided into two components with eachbeing subject to separate relative performance conditions over theperformance period.
	The performance period starts on 1 January 2015 and ends on31 December 2018.
	For 75% of the grant (1,989,338 SAR's) subject to Santos' TotalShareholder Return relative to the performance of the ASX 100companies (ASX 100 comparator group) over the performanceperiod.
	For 25% of the grant (663,086 SAR's) subject to Santos' TotalShareholder Return relative to the performance of the Standard &Poor's Global 1200 Energy Index companies (S&P GEIcomparator group) over the performance period.
	Following the applicable date, subject to compliance with the Company'sSecurities Trading Policy, the shares will not be subject to any restrictionson dealing.

Performance Conditions SARs – 4 Year Grant