Tribeca Global Natural Resources Ltd. · ASX:TGF
Tribeca Global Natural Resources — Investor Presentation (March 2022)
23 slides from Tribeca Global Natural Resources's investor presentation, March 2022
Slide 1: Santos (ASX:STO): A Mis-priced and Undervalued Decarbonisation Story
Santos (ASX:STO) A Mis-priced and Undervalued Decarbonisation Story Tribeca Global Natural Resources Investor Update March 2022 Santos’ Port Bonython, South Australia oil and gas processing plant powered by solar array Source: Company Reports Private And Confidential. Not For Public Distribution
Slide 2: Disclaimer & Confidentiality
Disclaimer & Confidentiality This document is not a research report. This document has been prepared by Tribeca Global Resources Pty Ltd (ABN 11 606 707 662) (“Tribeca”) under AFS License 239070 (Tribeca Investment Partners Pty Ltd) for a wholesale audience only and is intended for the exclusive ben
Slide 3: Contents
Contents Summary 4 ESG 2.0: From Divestment to Transition-Focused 5 Santos: A Compelling Decarbonisation Story 11 Appendix 19 Santos’ Barossa LNG project, Northern Territory Source: Company Reports
Slide 4: Summary
Summary Credible, visible Santos is a mispriced and undervalued decarbonisation story. Our valuation of $18/share represents almost ~150% upside to current share price. decarbonisation strategy Carbon negative Santos will be materially net negative carbon emissions by 2030 ¹. By comparison, global p
Slide 5: ESG 2.0 – From Divestment to Transition-Focused
ESG 2.0 – From Divestment to Transition-Focused Do you think Larry Fink is referring to a company The $10 trillion world’s largest asset like Santos? manager has changed its tune on how it implements ESG policy. THEN NOW “move to divest thermal coal assets “ foresighted companies across a wide and p
Slide 6: Moving from 'de-rating' to 're-rating'
Moving from ‘de-rating’ to ‘re-rating’ Investors who followed BlackRock to divest from the sector will now follow them back in Total Assets Under Management Committed to Fossil Fuel Divestment BlackRock’s policy announcement at Davos led to $40T $35T BlackRock other high profile asset managers commi
Slide 7: Oil Supply Issues: The Case for $85/bbl Long Term
Oil Supply Issues: The Case for $85/bbl Long Term US E&P Funding Gap U.S. E&P companies, long seen as the marginal Operating Cashflow less Capex ($bn) (LHS) vs Reinvestment Rate (%) (RHS) 60 170% producers of oil, have shifted behaviour as a result 50 150% of ESG 1.0 policies. 40 Operating Cashflow
Slide 8: Santos: Valuation Building Blocks to A$18.00/share or ~150% higher
Santos: Valuation Building Blocks to A$18.00/share or ~150% higher Santos has been a victim of relentless selling by domestic and offshore institutions implementing ESG 1.0 policies. Santos Valuation² at US$85/bbl oil ($A/share) $25.00 The result is a base business worth $11.50, or ~50% more than th
Slide 9: Santos to be Carbon Negative by 2030
Santos to be Carbon Negative by 2030 Carbon Capture and Storage (CCS) 2030 Blue Hydrogen (H2) + = Net Negative Carbon Emissions 9 March 2022
Slide 10: The Building Blocks to Net Negative Emissions
The Building Blocks to Net Negative Emissions Santos’ current Scope 1+2 emissions are ~6mt CO2 p.a. CCS and Blue Hydrogen to Drive Reductions (mtCO2pa) Carbon capture and storage projects (onshore and 10 offshore) will offset ~5.5mt CO2 p.a. Santos is pursuing a further ~0.6mt CO2 p.a. of direct emi
Slide 11: Santos: a Compelling Decarbonisation Story
Santos: a Compelling Decarbonisation Story 11 March 2022
Slide 12: Achievable Outcomes vs Laudable Promises
Achievable Outcomes vs Laudable Promises CCS technology is expected to be ~20% of 2050 decarbonisation targets globally Alan Finkel, former Chief Scientist of Australia, stated that CCS “has to work” for the world to reach net zero. The International Energy Agency Net Zero 2050 Roadmap assumes 20% o
Slide 13: Santos: Leveraging Existing Infrastructure
Santos: Leveraging Existing Infrastructure What sets Santos’ strategy apart from its peers is the use of their significant existing infrastructure to become a world leading decarbonisation company. Santos’ ownership and operatorship of their infrastructure is a major risk-mitigating factor versus ot
Slide 14: Upside Potential From Decarbonisation
~100% of Current Share Price Upside Potential From Decarbonisation Santos potentially has >A$7.50/share upside from execution of its decarbonisation strategy Moomba CCS Phase 1 and Bayu-Undan CCS alone add A$1.65/share under BP’s US$100/t carbon price assumption.¹ Cost of capital is key with access
Slide 15: 'Foresighted' Companies are Leading the Transition
‘Foresighted’ Companies are Leading the Transition Neste Peers1 400 300 +190% 200 100 -24% 0 2018 2019 2020 2021 Distribution of free-float on 31 August 2021 Perhaps best example of traditional hydrocarbon stock Excluding State of Finland and Climate Fund with 44.2% of Neste shares achieving re-rati
Slide 16: Santos Already Lagging Global Peers Due to Lack of Capital Management
Santos Already Lagging Global Peers Due to Lack of Capital Management Santos share price is flat in US$ terms over the past 12 months despite oil being up ~US$50/bbl, spot LNG rising >US$25/mmbtu and having bought Oil Search for no premium to fair value. Santos has underperformed US peers by 100%+ s
Slide 17: Sell-downs Would See Santos Go Net Cash
Sell-downs¹ Would See Santos Go Net Cash ~US$9bn of balance sheet headroom through CY25 for capital management at US$100/bbl FCF yield post sell-downs (%)¹ Gearing already below target at <25% today, with 40% US$1.5bn pa of FCF being generated post-growth 30% capex at US$85/bbl oil in 2022. 20% Sell
Slide 18: Huge Upside From Re-rating to Peer Group
Huge Upside From Re-rating to Peer Group More still to commanding a justified premium for stronger ESG credentials Santos implied share price on peer EV/EBITDA multiples (A$/share) Santos trading at 50% EV/EBITDA discount to 18 global peer group. 16 Entirely unjustified given higher than peer 14 pro
Slide 19: Appendix
Appendix
Slide 20: Moomba CCS Pioneering The Way
Moomba CCS Pioneering The Way Moomba CCS Phase 1 Valuation sensitivity to carbon price and WACC (A$/sh) Phase 1 of Moomba CCS, a 1.7mt CO2 p.a. US$165m capex WACC project (Santos net ~66%), took FID in late 2021. 5% 6% 7% 8% 9% 10% Technical risks extremely low at Moomba CCS with gas having US$40/t
Slide 21: Bayu-Undan CCS – a Near-term Game Changer
Bayu-Undan CCS – a Near-term Game Changer Bayu-Undan CCS has capacity of 10mt CO2 p.a. (Santos net 4.34mt CO2 p.a.), which would make it the largest operating CCS project in the world. Sits in Timorese waters, greatly increasing probability of opening it up to international carbon markets. Will proc
Slide 22: Blue Hydrogen – Quality Gas Resource and CCS Ownership is Key
Blue Hydrogen – Quality Gas Resource and CCS Ownership is Key High quality gas resource, located near CCS project, makes Cooper Basin ideal for Blue Hydrogen. Blue Hydrogen is 50-66.6% cheaper than Green Hydrogen according to IRENA. Can capture 90-95% of Scope 1+2 emissions with CCS, producing zero
Slide 23: Investor Relations
Investor Relations Email: [email protected] Web: www.tribecaip.com Singapore #16-01 Singapore Land Tower 50 Raffles Place, Singapore 048623 Tel: +65 6320 7711 Sydney Level 23, 1 O’Connell Street Sydney NSW 2000 Tel: +61 2 9640 2600
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