ASX / Media Release

      23 August 2018

      Santos doubles half-year underlying profit to $217 million and
      reinstates dividends to shareholders

        Half-year (US$million)                             2018                 2017                  Change

        Product sales                                      1,680                1,449                   16%

        EBITDAX1                                            883                  718                    23%

        Underlying profit1                                  217                  109                    99%

        Net profit/(loss) after tax                         104                 (506)                    nm

        Free cash flow1                                     367                  302                    22%

        Net debt                                           2,437                2,928                   17%

        Interim dividend (UScps)                            3.5                    -                   3.5cps
      nm denotes not meaningful

      Santos today announced a doubling of half-year underlying profit to US$217 million and the
      reinstatement of dividends to shareholders.

      Santos Managing Director and Chief Executive Officer Kevin Gallagher said: “Our strategy has
      been to establish a low-cost operating model that delivers strong cash flows through the oil
      price cycle.”

      “Today’s announcement of half-year results demonstrate delivery of our strategy with EBITDAX1
      up 23% to US$883 million and free cash flow1 up 22% to US$367 million. Underlying profit1
      after tax doubled to US$217 million.”

      “Strong free cash flow has enabled the company to reduce net debt to US$2.4 billion and
      reinstate dividends to shareholders.”

      “The Board has resolved to pay a fully-franked US3.5 cents per share interim dividend. This is
      the first dividend payment to shareholders since 2016 and reflects the Board’s confidence in
      Santos’ future prospects.”

      “These results are despite the loss of production from our PNG operations due to the
      earthquake and further emphasise the value of our core asset diversified portfolio.”

      Mr Gallagher said the recently announced acquisition of 100% of Quadrant Energy delivers
      increased ownership and operatorship of a high quality portfolio of low cost, long-life
      conventional Western Australian natural gas assets which are well known to Santos, and
      importantly significantly strengthens Santos’ offshore operating capability.



Media enquiries                         Investor enquiries                      Santos Limited ABN 80 007 550 923
Daniela Ritorto                         Andrew Nairn                            GPO Box 2455, Adelaide SA 5001
+61 8 8116 5167 / +61 (0) 455 319 770   +61 8 8116 5314 / +61 (0) 437 166 497   T +61 8 8116 5000 F +61 8 8116 5131
daniela.ritorto@santos.com              andrew.nairn@santos.com                 www.santos.com
                                                                                                      Page 1 of 3
“The acquisition is materially value accretive for Santos shareholders and advances Santos’
aim to be Australia’s leading domestic natural gas supplier.”

Strong first half results

Mr Gallagher said today’s announcement of half-year results demonstrated strong business
performance, with EBITDAX1 up 23% to US$883 million and free cash flow1 up 22% to US$367
million. Underlying profit1 after tax doubled to US$217 million.

“Consistent application of our disciplined operating model continued to deliver cost reductions
and efficiencies in the first half, with underlying production costs2 down 4% to US$7.79/boe
and further efficiency gains in onshore drilling confirming Santos as Australia’s lowest cost
onshore operator.”

“Continued cost reductions and efficiencies has enabled a reduction in full-year unit production
guidance to US$8.0-8.6/boe. This reduction in guidance is despite the impact of the PNG LNG
earthquake shutdown in the first half.”

“We will shortly achieve our net debt reduction target, more than a year ahead of schedule, and
therefore have a significantly stronger balance sheet to support our growth strategy.”

“We continue to advance our key major growth projects, with the Barossa development moving
into FEED in the second quarter and good progress being made toward building partner
alignment in PNG for three additional trains on the PNG LNG site.”

“We are also in discussions regarding a proposal received for Santos to farm-in to the P’nyang
field in PNG and are well placed to benefit from third-party access to our foundation PNG LNG
infrastructure.”

“Our Western Australia gas business continues to deliver strong results, with higher customer
demand driving production up 12% in the first half.”

“In Queensland, the Scotia CF1 project was completed ahead of schedule and under budget,
the Roma East development is progressing on schedule with the first wells already online, and
we sanctioned the initial phase of the development of the Arcadia field.”

“Production is growing again in the Cooper Basin due to our focus on efficiencies and strong
performance from recently connected wells. Oil production has reached the highest in four
years and unit production costs per barrel were down 13%, highlighting excellent performance
from our onshore development and operations teams.”

“Drilling more wells and lowering production costs – extracting more gas for less money – is the
best way to keep downward pressure on gas prices.”

“Santos is on track to supply about 70 PJ of gas into the east coast domestic market in 2018,
which is almost 13 per cent of expected demand,” Mr Gallagher said.

The first half result includes a net impairment of US$76 million (before and after tax) primarily
related to the company’s Asian assets which are held for sale. Completion of the sale is
expected in the second half of 2018 when Santos expects to book a profit on sale which is
expected to more than offset the first half net impairment of those assets.



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Interim dividend

The Board has resolved to pay a 2018 interim dividend of US3.5 cents per share fully-franked,
in line with the company’s sustainable divided policy announced in June 2018 which targets a
range of 10% to 30% payout of free cash flow.

The interim dividend will be paid on 27 September 2018 to registered shareholders as at the
record date of 29 August 2018.

Santos dividends are determined and declared in US dollars and paid to shareholders in
Australian dollars. Currency conversion for the interim dividend will be based on the exchange
rate on the record date of 29 August 2018. The Dividend Reinvestment Plan will not be offered
for the 2018 interim dividend.

Conference call and live webcast

Santos will host a conference call and live webcast for analysts and investors today at 11:00am
AEST.

Dial-in numbers for the conference call are listed below. Please quote passcode ID: 5545916.

For locations within Australia dial toll-free 1800 123 296 or toll 02 8038 5221.

For other countries, please use one of the following toll-free numbers: Canada (1855 5616
766); China (4001 203 085); Hong Kong SAR (800 908 865); India (1800 3010 6141); Japan
(0120 477 087); New Zealand (0800 452 782); Singapore (800 616 2288); United Kingdom
(0808 234 0757); United States (1855 293 1544). For all other countries or operator assistance,
please call +61 2 8038 5221.

The webcast will be available on Santos’ website from 11:00am AEST at www.santos.com.

Ends.




1
    EBITDAX (earnings before interest, tax, depreciation, depletion, exploration, evaluation and impairment), 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. The non-IFRS financial information is unaudited however the numbers
    have been extracted from the financial statements which have been subject to review by the Company’s auditor. A reconciliation between net profit after tax
    and underlying profit is provided in the Appendix of the 2018 Half-year results presentation released to ASX on 23 August 2018.
2
    Excluding the impact of shutdowns.




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