Santos Investor Day, page-63

Cosmo,

Thanks.

With respect the PSC for FAR, my query was because although some PSCs may delivery returns to the JV comparable to standard Australian PRRT returns most return much less, even worse than half as good. The fiscal terms for Dorado will be pretty straightforward with PRRT and normal corporate tax returning us something like 42% net of the profit before considering uplift on costs etc which improves it somewhat. I am rusty on the detail but all the analysts will have our terms modelled to the dollar already.

From what you say about the oil I am guessing ours is worth 10 to 20% more (including for that it is close to Asia). Sour isn’t great.

We are quite shallow, 900 metres is quite deep and with only 8000 bopd per well development will be relatively expensive. And as you say you can almost ignore anything at those depths that is delivering 1000 to 4000 bopd. These rates might decay quite rapidly too compared to ours which will be well supported by our gas (in the oil, not just as a cap).

I am starting to recognise why FAR might be drifting, retreating from the hype of a discovery size, of which much might be uneconomic. We’ve had some of the same sp retreat, as investors have started to focus on just our core easily exploitable liquids. Normal behaviour, typically with a build up again as FID and then first oil approach.

In comparison Dorado is so much better on so many counts. Pity we had quite so much gas in our oil though, otherwise we’d have a near perfect project -imho.

EL