Santos Limited

Thank you for standing by and welcome to the Santos Limited 2025 Half Year Results webcast. All participants are in a 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 Kevin Gallagher, Managing Director and Chief Executive Officer. Please go ahead.

Thank you and good morning and welcome to the presentation of Santos' 2025 half-year results. I'm speaking today from the traditional lands of the Kaurna people of the Adelaide Plains, and I pay my respects to elders past and present. I also acknowledge and recognise the support of traditional owners, indigenous people and nationals everywhere Santos operates around the world. Before I commence my report on what has been a strong financial and operational performance for Santos for the first half of 2025, you will have seen our update this morning on progress with the non-binding indicative proposal from the XRG Consortium. We are finalising an acceptable scheme implementation agreement and have made considerable progress. Importantly, the SIA will include customary protections for stakeholders should the potential transaction take longer than expected to complete. The consortium requested an extension of the exclusivity period to conclude due diligence and to obtain all necessary approvals to enter into a binding transaction. On the basis that we have made considerable progress towards an acceptable SIA and given the consortium has also again confirmed it has found nothing in due diligence that would lead it to withdraw its indicative proposal, Santos has agreed to extend the process deed for four weeks until the 19th of September. We will, of course, keep the market updated in accordance with our continuous disclosure obligations over the coming weeks. Now, turning to our first half results, I am pleased to report on another strong financial performance, underscoring the cash-generative strength of our base business. Our disciplined, low-cost operating model continues to deliver efficiency, and reliability. I will provide an overview of our first app performance and our Chief Financial Officer, Sherry Durie, will present the financial details. Following Sherry's presentation, I'll take you through our operational performance and progress against our 2025 strategic priorities, then open up the call to questions. Before we start, I draw your attention to the usual disclaimer on slide two. Safety drives everything we do and we have continued to deliver a strong safety performance during a period of high activity levels across our base business and across our development projects. Our lost time injury rate remains better than the IOGP 2024 global average, underscoring our dedication to maintaining a safe workplace. We've achieved an impressive 46% improvement in our total recordable injury rate compared to the first half of 2024. Our process safety performance, measured by the loss of containment incident rate, has also improved. While our safety performance is strong, there is never room for complacency and we will always pursue a culture of continuous improvement. Slide 4 summarises our financial results. Sales revenue of $2.6 billion generated EBITDAX of $1.8 billion. free cash flow from operations of $1.1 billion and profit after tax of $439 million. Our production for the first half of the year was 44.1 million barrels of oil equivalent. Our strong performance in the first half delivered positive all-in free cash flow of $258 million while investing in our growth projects. Our gearing remains within target at 23.7%, including the impact of operating leases. I am pleased that our strong performance has enabled the Board to resolve to pay an interim dividend of 13.4 US cents per share. The Board has also resolved to frack the interim dividend to 10% this period. Strong execution of our major development projects in the first half of 2025 has been a highlight. Arosa remains on schedule with production expected shortly. The Darwin LNG plant has achieved ready for start-up. The VW Opal FPSO is on location, successfully hooked up to the subsea infrastructure, with only final commissioning work to go before reaching RFSU within weeks. This has been achieved within three months of schedule and within the original budget, thanks to outstanding self-execution, disciplined contractor management, effective contracting strategies and simultaneous operations that prevented potential delays from the COVID pandemic, regulatory approvals, legal challenges, and supply chain disruptions. Our Alaska project is also progressing well, and we've brought first oil guidance forward to the first quarter of 2026, with a ramp-up to plateau expected in the second quarter. This is another outstanding example of Santosi's self-execution project delivery model in action. The pipeline was completed a year ahead of schedule and the challenging logistics of river lifting key processing modules from Canada and barging the seawater treatment plant from Indonesia have been executed flawlessly. Our drilling and completion team have just finished the 21st well, the first combination well with a 10,000 foot long horizontal section that replaces two wells with one single well. Combination wells together with deployment of other innovative drilling technologies and techniques are delivering real cost savings and faster job completion times. This represents a significant value upside opportunity for future developments in Alaska. We're now drilling the 22nd well, which will be the longest well in the field, with an expected total depth of 27,000 feet. Six wells have been flowed back in 2025, including three producers, bringing average expected flow rates per well to 7,000 barrels per day at start-up. PICA and Barossa are expected to deliver around a 30% increase in production by 2027, setting the company up with long-term, stable cash flows to support returns to shareholders and disciplined investment in future production growth. Moving to slide 7. The excellent operational performance of our base business has ensured reliable production and solid cash flows, with LNG assets performing strongly. Development projects nearing completion and our LNG marketers continuing to capture outstanding value through our customer-focused contracting strategy. These achievements demonstrate the strength of our portfolio and our ability to deliver value through the commodity price cycle. Demand for LNG from Asia remains strong, underpinned by economic growth. Our portfolio is well positioned, commanding premier for high heating value LNG from Barossa and P&G LNG, and providing reliable regional supply. Santos' diversified LNG contract mix also provides the flexibility to take advantage of market conditions. Our recent contract with Qatar Energy demonstrates our ability to leverage the flexibility of our LNG portfolio. The LNG portfolio is 92% contracted and around 80% oil linked between 2025 and 2029. Portfolio pricing is around 14.7% slope to Brent from 2025 to 2027. Our strong release prices in the first half realised prices from the first half of 2025 have exceeded our peers and supported strong cash margins. Decommissioning is being delivered to ensure safety of people, property and the environment. We are phasing our decommissioning spend to prioritise safety and facility integrity, capturing synergies and applying lessons learned from our own experience and from across the industry to reduce both costs and job completion time. We're also adopting a responsible approach to waste management with the routineer Exeter, Fletcher and Finikeen decommissioning campaign, recycling more than 100 tonnes of metal, plastics and wood this year. Moomba CCS Phase 1 is a great demonstration of our project self-execution, online and under four years from FID and performing to expectations. In the first half, it reached a major milestone. safely and permanently storing more than 1 million tonnes of CO2 equivalent since start-up. Since the start-up of MIMBA CCS, Santos emissions intensity has improved by 22%, and we have already achieved 84% of our target to reduce Scope 1 and 2 emissions by 30% by 2030. We operate in some of the world's most demanding environments, the PNG Highlands, the Australian Outback, deep water basins of WA, and the Alaskan North Slope. Different environments, different regulations, one disciplined, low-cost operating model. In an industry with a track record of poor project execution, Santos is set to deliver three major development projects within months of target and within 10% of the original combined budgets. And we achieved this during the COVID years, navigating regulatory approval and legal challenges, applied to chain disruption and inflationary pressures. Through it all, we remained disciplined. We focused on our own ways and we stuck to our strategy. At the same time, we maintained safe operations and strong base business performance. This has been a phenomenal achievement. Our self-execute capability has been developed and refined over the years because the nature of our assets means we are constantly in development mode. delivering large, short-cycle CapEx development projects every year. Self-execution means we reduce costs, improve efficiency, and accelerate delivery by self-managing our subcontractors. It's how we transform technical excellence into sustained value. Over the past decade, our disciplined, low-cost operating model has driven production costs down, strengthened the portfolio, and delivered strong free cash flow and returns for shareholders. At the same time, we've successfully executed three major developments, member CCS phase one, Barossa LNG and PICA phase one, all while keeping gearing within our target range. With production set to rise as Barossa and PICA phase one come online, and unit production costs expected to trend lower over time, our strategy is clear. Generate cash, reward shareholders, reinvest to backfill and sustain our infrastructure, and to build and grow our production while continuing to operate safely and reliably. I will now hand over to Sherry to provide an overview of our financial results.

Thanks, Kevin, and thank you everyone for joining us today. Santos has delivered a strong set of financial results underpinned by solid-based business performance. Our disciplined, low-cost operating model continues to deliver. highlighted by a unit production cost of $7.28 per barrel and free cash flow from operations of $1.1 billion. The business had a positive all-in free cash flow of $258 million for the period, while continuing to invest in our two major development projects, Verosa and PICA. Our balance sheet remains robust, with gearing of 23.7%, including leases at the end of the half, and excellent performance during a period of significant investment. And on this basis, we are pleased to declare an interim dividend of $435 million. Last year, we rolled out our updated capital allocation framework. The updated framework is designed to prioritize and enhance shareholder returns as we move beyond the capital-intensive period of a major growth cycle and new production comes online. It provides a clear pathway to sustainable, improves returns across the cycle. The framework is built around three key pillars, maintaining a strong balance sheet, delivering improved shareholder returns, and generating strong free cash flow from operations. Together, these give us the flexibility and the resilience to create long-term value for our shareholders. This slide really shows the strength of our disciplined, low-cost operating model. On the left, you can see our strong free cash flow generation, even through periods of commodity price headwinds. In the first half of 2025, we've delivered more free cash flows than the first half of 24, despite significantly lower commodity prices. On the right, the impact is clear. Since adopting our disciplined low-cost operating model, we've returned more to shareholders than the company's entire market cap back in 2016. We remain focused on prioritizing shareholder returns, and with a strong balance sheet, we have the flexibility to keep delivering through the cycle. Shareholder returns of $435 million, equivalent to 40% of free cash flow from operations, and up on last year, have been delivered this half in line with our capital allocation policy. In the first half of 2025, Free cash flow from operations was around $1.1 billion. This result is higher than the first half of 2024 and supported by lower production costs and lower capex. Our operating free cash flow for the first half of 2025 tells its own story. A resilient, diversified portfolio powered by high-performing core assets, secure LNG offtake agreements, inflation-linked fixed-price domestic gas contracts, and an unwavering commitment to low-cost operations. Our underlying earnings show that product sales revenue remains strong at over $2.6 billion, generating in-deducts of more than $1.8 billion and underlying profit of $508 million. Underlying profit is lower than the prior comparative half due to lower revenue from real-life domestic gas and crude oil pricing and sales volume, higher restoration and financing costs, offset by lower tax expenses. We recorded a one-off non-recurring exploration and evaluation impairment of $119 million against the P&G business. These are historical costs which were capitalized as a part of the oil search acquisition, and since then, the Hyde footwall prospect's been unsuccessful. Despite the footwall section being plugged and abandoned, pleasingly, the hanging wall section was successful. with the operator planning to bring it online between late 2025 and early 2026. Building on a strong first-half performance, we've tightened our unit production cost guidance for 2025 to $7 to $7.40 for BOE. Muspirosa, LNG, and PICA Phase I are online. We remain on track to target unit costs below $7 for BOE. And we continue to target an unhedged operating free cash flow breakeven of under $35 per barrel in 2025, ensuring our portfolio stays resilient in an ever-changing commodity price environment. Retaining our investment-grade credit ratings from Fitch, Moody's, and S&P reflects Santos' focus on disciplined capital management and our low-cost operating model in place since 2016. Net debt stood at less than $4.9 billion at the end of the first half, with gearing in our target range. As noted previously, we do expect that gearing will increase temporarily later this year as we near project completion for Barossa and PICA, and with the inclusion of the LEAF liability from the Barossa FPSO, after which it is forecast to reduce as development capital expenditures decline and new revenues materialize. We continue to hold a high level of liquidity with $3.9 billion at the end of June in a combination of cash facilities and undrawn finance facilities. In accordance with our capital management framework, we look to protect the balance sheet and safeguard our financial position through hedging strategies for commodity and FX exposures. We have 7.5 million barrels of oil hedged at a floor of $65 and an average cap of $80.67. Further, we have hedged positions in place for FX of 930 million Australian dollars in the second half of 2025, and 1.06 billion Australian dollars in 2026. This hedging has been undertaken at rates well below the long-term Australian dollar FX averages, providing strong FX protection as we complete our current period of major capital expenditure. Overall, we've had a strong financial performance in the first half of 2025, returning $435 million to shareholders. Thank you, and I'll now hand back over to Kevin.