Santos Limited · ASX:STO
Santos — Investor Presentation (June 2005)
10 slides from Santos's investor presentation, Jun 7, 2005
Slide 1: Transition to A-IFRS
Transition to A-IFRS Peter Wasow Chief Financial Officer 7 June 2005 1 Important Notice The figures contained in this presentation are Santos’ current best estimate of the consequences for Santos of adopting A-IFRS. However, these may be further refined prior to the release of our half year results
Slide 2: Agenda; A-IFRS at Santos - Key Messages
Agenda • Key messages • Timing • Financial Impacts on Opening Balance Sheet • Analysis of Future Impacts on Income Statement • Summary and Questions 3 A-IFRS at Santos - Key Messages Underlying rationale for transition to A-IFRS is sound • International standardisation of accounting policies • Impro
Slide 3: Timing of A-IFRS Implementation; Key transition impacts
Timing of A-IFRS Implementation Clarifying now to separate transition from actual financial performance First accounts incorporating A-IFRS will be 2005 Half Year • Mandatory, not optional • Applies from 1 January 2005 • Opening balance sheet as at 1 January 2004 restated to calculate 2004 impacts •
Slide 4: AASB 112 Income Taxes; AASB 121 Effects of FX Rates
AASB 112 Income Taxes Summary • Increase the amount of deferred income tax liability • Reflects differences between the accounting and tax basis of net assets rather than just timing differences Application at 31.12.03 • Increases net deferred tax liabilities $148 m • Reduces equity $148 m Future im
Slide 5: AASB 136 Impairment Testing; Cash Generating Units
AASB 136 Impairment Testing Summary • Assess impairment of the carrying value of producing assets by applying the Cash Generating Unit (CGU) concept • Impacts mainly late life fields (Carnarvon, USA, Bonaparte) Application at 31.12.03 • Reduces carrying value of assets $337 m • Reduces carrying valu
Slide 6: AASB 137 Restoration & Abandonment; AASB 6 Exploration and Evaluation
AASB 137 Restoration & Abandonment Summary • Adjust the restoration liabilities to reflect the present value of the total expected restoration costs • Capitalise the present value as a component part of the asset Application at 31.12.03 • Increases carrying value of assets $106 m • Increases provisi
Slide 7: Shift to Successful Efforts; Successful Efforts Accounting
Shift to Successful Efforts Industry Standard • Used by all US majors, and over 50% of US independents • Consistent with BHP Billiton and Woodside Recommended by IASC Steering Committee Increases transparency Increases comparability across peer companies Improves internal cost awareness • Direct exp
Slide 8: Successful Efforts; Summary Balance Sheet Impacts
Successful Efforts Impacts mostly areas with large accumulated exploration costs • Cooper, Carnarvon, Bonaparte, USA Application at 31.12.03 • Reduces capitalised exploration $672 m • Reduces net deferred tax liabilities $185 m • Reduces equity $487 m (in addition to AASB 136 impact) Future impacts
Slide 9: Summary 2004 Impacts
Summary 2004 Impacts ($m) AGAAP AIFRS Depreciation Expense 171 167 Depreciation $/boe 3.63 to 3.55 Depletion Expense 344 294 Depletion $/boe 7.30 to 6.24 Exploration Expense Non-producing Areas 6 31 44% success rate in 2004 Producing Areas - 88 Impairment Expense/(Write-back) 16 (5) 2004 economic as
Slide 10: 2005 Exploration & Evaluation Costs; Summary
2005 Exploration & Evaluation Costs All figures in A$m 2004 2005 Actual Forecast Exploration Studies & seismic 67 66 Expense 100% Well costs 59 104 Capitalise successful wells Total exploration 126 170 Evaluation Studies & seismic 22 29 Expense 100% Well costs 69 80 Capitalise successful wells Total