Santos Limited

Thank you for standing by and welcome to the Santos Limited 2024 half-year results webcast. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Kevin Gallagher, Managing Director and Chief Executive Officer. Please go ahead.

Good morning again and welcome to our presentation of the Santos 2024 half 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 today's 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 make some opening remarks. I'd like to start by acknowledging the traditional lands of the Kaurna people of the Adelaide Plains where I'm speaking from today. I pay my respects to the elders past, present and emerging. I'd also like to 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 from operations. I'd also like to touch on some of the highlights from this result. For the first half of 2024, Santos generated production of 44 million barrels of oil equivalent, sales revenue of $2.7 billion. free cash flow from operations of $1.1 billion, EBITDAX of $1.8 billion, and underlying profit of $654 million. And pleasingly, the board has determined to pay an interim dividend of $422 million, or 13 US cents per share. Based on an Australian dollar exchange rate of 0.67%, That's approximately 19 Australian cents, I should say, 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. Before I talk about progress on our projects, I do want to mention safety performance. Always safe is a core value at Santos. Our expectation is that every day, Everyone who works at Santos is focused on keeping themselves and their workmates safe and going home healthy. Personal safety performance improved in the first half, and we have seen a significant reduction in process safety loss of containment incidents. As you can see from our results presentation, we are delivering on our major projects. Phase one of the Moomba CCS project is in advanced commissioning stages. The pipeline is currently being pressured up and CO2 is to be introduced into the processing system imminently. The project remains on track for first injection and ramp up to full capacity this year. Phase one of Mumba CCS will be one of the lowest cost CCS projects in the world. and have capacity to permanently store up to 1.7 million tonnes of carbon dioxide annually, making Mumba CCS a significant part of Australia's journey to net zero emissions. The Barossa project is nearing 80% complete, with first gas expected in the third quarter of 2025, as per previous guidance. The gas export pipeline that will deliver gas from the field to Darwin LNG is now complete, And the third Barossa well has been successfully drilled and completed with better than expected reservoir results. And the FBSO vessel is on track to head to Australia in the first quarter of 2025. At full production rates, Barossa is expected to add approximately 1.8 million tonnes a year to Santos' expanding LNG portfolio. In Alaska, phase one of the PICA project is almost 60% complete and first oil is expected in the first half of 2026. The drilling program is now on to the 11th well. Six wells have been stimulated and flowed back with encouraging results in line with pre-drill prognosis. PICA is a low carbon intensity project that will be net zero scope one and two emissions from first production. And our strong base business continues to deliver with record reliability in P&G. The Angori well is coming online later this year and record production rates in Queensland across our CSG operations. And in Western Australia, we are safely and efficiently delivering on our decommissioning programme. The base business provides a foundation for reliable production and cash flows to support returns to shareholders in accordance with our capital management framework. Our unrelenting focus on sticking to our strategy and implementing our disciplined low-cost operating model has delivered consistent results and kept the business resilient and performing strongly over the last few years. We continue to generate strong free cash flows from our operations to maintain the strength of our balance sheet and to provide returns to our shareholders. Thank you, and we're now happy to take your questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up your handset to ask a question. The first question comes from the line of Dale Conders with Barren Joy. Please go by it.