Santos Limited

Good morning, my name is Krista and I'll be your conference operator today. At this time, I would like to welcome everyone to the Santos 2023 full year results webcast and conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, again, press star one. Thank you. I would now like to turn the conference over to Kevin Gallagher, Managing Director and Chief Executive Officer. Kevin, you may begin your conference.

Thank you. And good morning and welcome to our presentation of the Santos 2023 full year results. Joining me today is Chief Financial Officer, Anthea McKinnell. Anthea and I recorded a video presentation on today's results, which you can find on our website, along with the presentation. We're not going to repeat the video presentation on this call. We will, however, be happy to take your questions. Before we do that, I'd like to start by acknowledging the traditional lands of the Gardiner people of the Adelaide Plains, where I'm speaking from today. I pay my respects to their elders past, present and emerging. I also acknowledge and recognize the support of traditional owners and indigenous people everywhere Santos operates, including our local communities in Papua New Guinea, Timor-Leste, and Alaska. I'm pleased to present yet another solid set of financial results that demonstrate the success of our disciplined operating model. Santos continues to generate strong cash flow despite the challenging operating environment. I'd also to touch on some of the highlights from this result. In 2023, Santos generated sales revenue of $5.9 billion, EBITDAX of $4.1 billion, free cash flow from operations of $2.1 billion, and underlying profit of $1.4 billion. The Board has determined to pay a final dividend for the year of $569 million, or 17.5 US cents per share, unfranked. We are pleased to continue to deliver strong cash returns to our shareholders while balancing the need to invest in our business. Our lost time injury rate has improved substantially since 2017. However, contractor safety performance has emerged as a key watch area, and we continue to work with our contractors to drive down injury rates across that workforce. Process safety performance is critical to our business. Always safe is a core value here at Santos. Our expectation is that every day, everyone who works at Santos is focused on keeping themselves and their workmates safe, and of course, going home safely. Across the business has been a very busy year. At GLNG, the work we've done at Fairview on horizontal drilling is expected to deliver well productivity 15 times higher than vertical wells have historically produced. GLNG also achieved a record 455 new well connections in 2023. In P&G, Angoria continues to progress, and one of two wells has been successfully drilled and completed. We continue to drive productivity and reliability in our operated P&G business, with reliability post the oil search merger increasing significantly to more than 95%, delivering around 1 million barrels of incremental production in 2023. In the Cooper Basin, We drilled 108 wells and connected 96 in 2023, and we'll continue to chase higher production this year. In the Northern Territory, we shipped seven Darwin LNG cargoes from Bayou London over 2023. Bayou London produced beyond expectations and continues to supply domestic gas into the Northern Territory. And in Western Australia, we extended the field life of reindeer, into the first half of 2024. In Alaska, the PICA project is progressing and on track. Five wells have been drilled and flow back results from the first two wells are in line with pre-drill expectations. The Barossa gas project is on track. Since drilling recommenced in January, we've completed one well ahead of plan and the second well is now in progress. Well flow test results are in line with pre-drill expectations with CO2 content at the low end of concentration expectations. More than 50% of the gas export line has been laid and is 68% complete. We're making good progress with Barossa and First Gas is now only just around 18 months away. Our Santos Energy Solutions business continues to expand its project pipeline and is delivering on a suite of projects. The Mumba CCS project is now more than 80% complete. We have drilled four injection wells and we expect to begin injecting CO2 later this year. Feed for the Bio London CCS project is now more than 86% complete and we have signed four MOUs with potential customers and the Australian government has passed legislation to enable cross-border carbon transfer. In WA, we expect Reindeer CCS to be a customer-led project, and I am pleased to announce that we've moved into feed. And finally, I am very excited about our carbon solutions business, which continues to progress projects in Australia, PNG and Alaska, where we are executing agreements with Alaskan landowners to generate nature-based carbon credits for our PICA project. Santos has almost 4,000 landholder agreements, and we're working with a number of those landholders to identify high-quality nature-based opportunities to generate carbon credits. We are committed to achieving our net zero scope one and two emissions targets by 2040, and we are confident our disciplined approach to operating our business and allocating capital will deliver strong returns to shareholders over the long term. A relenting focus on sticking to our strategy and implementing our disciplined operating model has delivered consistent results and kept the business resilient and performing strongly. We continue to generate strong free cash flows to maintain the strength of our balance sheet and to provide returns to our shareholders. Thank you. We're now happy to take questions.

If you like to ask a question, please press star one on your telephone keypad. Your first question comes from the line of James Byrne from Citi. Please go ahead.