ASX / Media Release

      20 August 2020

      Santos reports 2020 half-year results

       Half-year (US$m)                                2020                  2019                 Change

       Product sales                                   1,668                1,974                   -16%

       EBITDAX1                                         995                 1,260                   -21%

       Underlying profit1                               212                  411                    -48%

       Net (loss)/profit after tax                     (289)                 388                   -174%

       Free cash flow1                                  431                  638                    -32%

       Interim dividend (UScps)                          2.1                  6.0                   -65%

      Santos today reported first half free cash flow of US$431 million and underlying profit of
      US$212 million. The results reflect significantly lower oil prices compared to the previous first-
      half due to the impact of COVID-19 on global oil demand.

      The reported net loss after tax of US$289 million includes the previously announced non-cash
      impairment due to revised oil price assumptions.

      The Board has resolved to pay an interim dividend of US2.1 cents per share fully-franked, in line
      with the company’s sustainable dividend policy which targets a range of 10% to 30% payout of
      free cash flow.

      Given the ongoing uncertain economic impact of COVID combined with the lower oil price
      environment, the Board determined it was prudent on this occasion to set the interim dividend at
      the lower end of the target payout range. The Board will review the payout again when it
      considers the final dividend in February.

      Santos Managing Director and Chief Executive Officer Kevin Gallagher said the first half of
      2020 had delivered record production volumes and strong free cash flow, despite the
      significantly lower oil prices.

      “These results again demonstrate the resilience of our cash-generative operating model in a
      lower oil price environment and strong operational performance across our diversified asset
      portfolio. Completion of the ConocoPhillips acquisition in May boosted our production to record
      levels and we expect even stronger production in the second half.

      “Our disciplined operating model enabled us to maintain activities key to sustaining strong
      operational performance and stable production across all of our core assets, and we are now
      targeting a free cash flow breakeven oil price of less than US$25 per barrel in 2020.




Media enquiries                     Investor enquiries                      Santos Limited ABN 80 007 550 923
James Murphy                        Andrew Nairn                            GPO Box 2455, Adelaide SA 5001
+61 (0) 478 333 974                 +61 8 8116 5314 / +61 (0) 437 166 497   T +61 8 8116 5000 F +61 8 8116 5131
james.murphy@santos.com             andrew.nairn@santos.com                 www.santos.com
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“Consistent application of our disciplined operating model continues to deliver cost reductions
and efficiencies, with unit production costs down 6 per cent to US$6.81/boe (excluding the
ConocoPhillips acquisition).

“The acquisition of ConocoPhillips assets in northern Australia and Timor-Leste was fully-
aligned with our growth strategy to build on existing infrastructure positions and delivered
operatorship and control of strategic LNG infrastructure at Darwin.

“We were pleased to complete the acquisition in May for a reduced up-front purchase price and
the integration of our two businesses is progressing well. Integration savings are being identified
and realised rapidly, and we are now targeting the upper end of synergy guidance of
US$50-75 million.

“Our balance sheet is strong with over US$3 billion in liquidity and we remain well positioned to
leverage our growth opportunities when business conditions improve.

“COVID-19 and the low oil price has presented a challenging time over the past couple of
months however our disciplined, low-cost operating model has allowed us to navigate these
challenges while remaining well positioned for growth on the other side.

“Santos remains confident that when prices and demand recover, our projects will be better
placed than those in our competitor countries to leverage the opportunities that will inevitably re-
emerge.

“While FID on the Barossa project was deferred given the uncertain economic impact of COVID-
19 combined with the lower oil price environment, since assuming operatorship we have
progressed value improvement work targeting reduced project costs. Barossa remains an
important project for Santos due to its brownfield nature and its low cost of supply.

“We are also well-progressed on Dorado pre-FEED and aim to take a FEED-entry decision on
this exciting project in the second half of 2020.

“The Narrabri gas project was referred to the NSW Independent Planning Commission in June
with a determination expected in the third quarter. Narrabri has the potential to supply up to half
of NSW’s natural gas demand.

“In the Cooper Basin, our focus on low-cost, efficient operations contributed to stronger
production and record liquids throughput as we continue to optimise capital efficiency and
identify new opportunities to extract value from our significant midstream infrastructure.

“We are also progressing FEED work for the Moomba carbon capture and storage project,
which has the potential to significantly reduce emissions and be an enabler for the production of
hydrogen in the future,” Mr Gallagher said.




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, hedging as well as items that are subject to
    significant variability from one period to the next. 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 auditor. A reconciliation between net loss after tax and underlying profit is provided in the Appendix of the
    2020 half-year results presentation released to ASX on 20 August 2020.




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Live webcast

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

To access the live webcast, register on Santos’ website at www.santos.com.


This ASX announcement was approved and authorised for release by Kevin Gallagher, Managing Director and
Chief Executive Officer.




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