SANTOS LIMITED — Share Issue/Capital Change 2016

Aug 22, 2016

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	Fully paid ordinary shares.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	4,523 shares.106,498 SARs, each being a conditionalentitlement to receive 1 fully paid ordinaryshare in the capital of the Company, subjectto the satisfaction of performanceconditions.
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)	4,523 consistent with all other shares onissue.Refer Annexure A for SARs.
4	Do the securities rank equally in all respectsfrom the issue date with an existing class ofquoted securities?	Yes, the new shares rank equally in allrespects with other fully paid ordinaryshares.
	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	Shares allocated on vesting of SARs willrank equally with other fully paid ordinaryshares.

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 5 Issue price or consideration Nil
• 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)
• 6a Is the entity an eligible entity that has obtained security holder approval under rule 7.1A?

If Yes, complete sections 6b – 6h in relation to the securities the subject of this Appendix 3B, and comply with section 6i

• 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
• 7 Issue Dates 23 August 2016

Issued at no cost upon grant.

Issue of shares on the vesting of Share Acquisition Rights issued pursuant to the ShareMatch Plan.

Issue of SARs pursuant to the terms of SEEIP.

Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A.

Cross reference: item 33 of Appendix 3B.

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

Class

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

Class

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

Rank equally with existing fully paid ordinary shares.

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 nonrenounceable? 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 entitlementsare to be dealt with.
	Cross reference : Rule 7.7
19	Closing date for receipt of acceptances orrenunciations
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 theissue
24	Amount of any handling fee payable to brokerswho lodge acceptances or renunciations onbehalf 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 offerdocuments will be sent to persons entitled
27	If the entity has issued options, and the termsentitle option holders to participate on exercise,the date on which notices will be sent to optionholders
28	Date rights trading will begin (if applicable)
29	Date rights trading will end (if applicable)
30	How do security holders sell their entitlementsin full through a broker?
31	How do security holders sell part of theirentitlements through a broker and accept forthe balance?
32	How do security holders dispose of theirentitlements (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 – 100,000 100,001 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

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

74,325

Fully paid ordinary shares.

Yes

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, End of restriction period for 74,325 fully paid ordinary shares issued pursuant to the vesting of Share Acquisition Rights (SARs).

clearly identify that other security)

• 42 Number and class of all securities quoted on
• 43 Number and class of all securities not quoted on ASX 12,500

	Number	Class
Number and class of all securities quoted onASX (including the securities in clause 38)	1,774,827,079	Fully paid ordinary shares.

Number	Class
	Executive share plan '0' sharesof 25 cents each paid to 1 cent.
12,500	Executive share plan '2' sharesof 25 cents each paid to 1 cent.
10,206,746	Share Acquisition Rights issuedpursuant to the SantosEmployee Equity Incentive Plan(SEEIP).
1,422,588	Executive options issuedpursuant to the SantosExecutive Share Option Plan.
280,916	Fully paid ordinary sharesissued pursuant to the vestingof SARs.
10,979	Fully paid ordinary sharesissued pursuant to the NonExecutive Director Share Plan.
Nil	Fully paid ordinary sharesissued pursuant to theShareMatch Plan.
1,096,555	Share Acquisition Rights issuedpursuant to the ShareMatchPlan.
Nil	Fully paid ordinary sharesissued pursuant to the ESGEmployee Incentive Plan.
96,860	Fully paid ordinary sharesissued pursuant to the vestingof ShareMatch.
9,601	Fully paid ordinary sharesissued pursuant to the vestingof SARs.

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 indemnify 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: 23 August 2016

Print name: DAVID THUAN JIN LIM

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

ANNEXURE A

Number of SARs	106,498
Issue price	Nil
Principal terms	The Share Acquisition Rights (SARs) will be divided into four tranches,each of which will comprise 25% of the SARs, with each being subject toseparate relative performance conditions over the performance period.
	The performance period starts on 1 January 2016 and ends on31 December 2019.
	•Tranche 1 (26,625 SARs) subject to Santos' Total ShareholderReturn relative to the performance of the companies comprisingthe ASX 100 Index as at 1 January 2016.
	•Tranche 2 (26,625 SARs) subject to Santos' Total ShareholderReturn relative to the performance of the companies comprisingthe S&P Global Energy Index as at 1 January 2016.
	•Tranche 3 (26,624 SARs) subject to Santos' performance inlowering its Free Cash Flow Breakeven Point.
	•Tranche 4 (26,624 SARs) subject to Santos' performance inrelation to Return on Average Capital Employed.
	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