Santos Limited (STO) Earnings Call Transcript & Summary

Well, good morning, ladies and gentlemen, and fellow shareholders. As chair, it's my pleasure to welcome you to the 2025 Annual General Meeting of Santos Limited. My name is Keith Spence. It's great to see so many of you here at the Adelaide Entertainment Centre today. Our live webcast is also underway. I begin by acknowledging that we're meeting on the traditional land of the Gana people and I pay my respects to their elders past and present. I also acknowledge the traditional owners and indigenous people everywhere we operate and thank them for working with us. I hope you enjoyed the opening video and you're as proud as I am of the outstanding progress we've made with our major projects over the past year, starting up our Moomba carbon capture and storage project last September and moving rapidly towards first gas from Barossa LNG this year and first production from Pikka next year. Kevin and I will talk more about that during the business of the meeting. Before we commence the business of the meeting, I'll ask you to please familiarize yourselves with the evacuation procedures shown on the screen above. I also wish to advise that today's AGM is being recorded and the recording will be made available for viewing on our website after the meeting. I confirm that a quorum is present, and I now formally declare the meeting open. Let me commence our business for today with some introductions. Fellow members of the Santos Board here today include from my far left, nonexecutive -- Independent Nonexecutive directors, John Lydon, Yasmin Allen, Musje Werror. And seated immediately to my left is our Managing Director and Chief Executive Officer, Kevin Gallagher. Next to me on my right is our Company Secretary, Amelia Senneck. And on Amelia's right, Independent Nonexecutive Directors, Mike Utsler, Janine McArdle and Vickki McFadden. Vanessa Guthrie is unfortunately unable to join us in person today due to a family matter of urgency that requires her attention. Vanessa is viewing the proceedings via the live webcast. A number of our executives are also present at today's AGM. So on behalf of the Board and our executive management team, we look forward to catching up with you for some light refreshments once the meeting has concluded. Also present are Darren Lewsen, [ Daryl Hall ] and Richard Bembridge, representing our independent auditor, Ernst & Young. To allow everyone attending the meeting an opportunity to vote, I now open the polls for all resolutions set out in the notice of meeting. Shareholders and proxy holders can vote using their smartphone following the instructions on registration card provided by Computershare, which are also shown on the screen above. Please make yourself known to a Computershare representative if you need any assistance with casting your votes. I invite you to start submitting your votes on your device from this point onwards during the meeting. You can vote on the resolutions at any point during the meeting, and you don't need to wait until the relevant item of business. Votes can be changed up until the time the poll is closed. To ensure that there is sufficient time for all votes to be cast, the polls will be closed 10 minutes after the conclusion of today's meeting. As advised in the notice of meeting, I will vote all available undirected proxies in favor of all resolutions. I'll display the proxy voting outcome for each item of business before moving to the next item. The formal results of the poll will be notified to the ASX after the meeting and will be posted on the Santos website. You may have seen when you entered this morning that there's a question registration table. Many of you have already registered questions for item of business today, and these will take precedence. For those who wish to ask a question today, but are yet to register that question, please proceed to the question desk located in the adjoining room. The desk will remain open during the meeting, and we welcome you to register your questions at any time. If you register to ask a question at the appropriate item of business, you'll be called to ask your question. And if time permits, you may return to the question desk for further questions on an item of business. However, we ask that you initially restrict yourself to one question at a time on each item of business to ensure that as many shareholders as possible have to speak. There may not be sufficient time available to address all the comments and questions raised even if they've been registered. However, I will provide a reasonable opportunity for shareholders as a whole to ask questions on each item. Further questions or comments from the floor may also be considered at the end of the meeting if time permits. If you require more information about the question registration process, please see one of the Santos staff members present, and they will be able to assist you. I'll commence our business today with my report to you. And I'll ask you to please note that the values that I refer to are in U.S. dollars unless otherwise stated. So on behalf of the Board, I'd like to acknowledge the work and the commitment of everyone at Santos throughout 2024. Our Managing Director and CEO, Kevin Gallagher, and his team have continued the momentum of previous years by generating strong cash flows and through sound execution of our major projects to bring on new production. I'd like particularly to congratulate everyone at Santos for achieving the company's best personal safety performance in 10 years. Our company continues to drive shareholder value through our disciplined low-cost operating model and our strategy to build and sustainably grow production while decarbonizing our operations. This was achieved despite the headwinds of global political instability and the upending of the global trading system that was based on building open competitive markets over many decades following World War II. Together, we faced the global challenges of energy security, climate change and the energy transition, the digital revolution that is changing the way we work, heightening geopolitical tensions and the risk of more conflicts and the contraction of global trading. This uncertain, volatile, complex world, which I see as being with us for many years to come, is adversely affecting the global economy and causing volatility in commodity prices. Our disciplined low-cost operating model and the value-based decisions that Santos has taken over the past 9 years has positioned the company to be competitive through the commodity cycle, with a free cash flow breakeven oil price of less than $35 per barrel. And our strategy to backfill and sustainably grow our production around our existing LNG and liquids infrastructure positions us well to take advantage of the long-term growth on our doorstep in the Asia Pacific, which accounts for around half of total global energy demand. Now to our results and progress in 2024. Financial performance was strong with Santos generating $1.9 billion of free cash flow from operations. Production was just over 87 million barrels of oil equivalent. The Board was pleased to declare a final dividend of $0.103 per share unfranked, bringing total dividend declared for 2024 to $0.233 per share. Since 2016, Santos has generated more than $12 billion in cumulative free cash flow from operations. And we've returned more than $4 billion of that to you, our loyal shareholders. To put that into perspective, we've returned more to shareholders than the entire market capitalization of the company back in 2016. In November, we announced an updated capital allocation framework that will target returns to shareholders of at least 60% of all-in free cash flow from 2026, once Barossa and Pikka are online. When gearing is below our target range of 15% to 25%, up to 100% of free cash flow would be returned to shareholders in the forms of dividends and/or buybacks. There's no target set for the allocation between buybacks and cash dividends. The Board will consider the best way to return capital to shareholders based on market conditions at the time. The timing for implementing the updated framework follows a period of major capital investment for Santos in Barossa and Pikka. And I'm pleased to say, now we have the finishing line in sight for both projects. Barossa is tracking on the original schedule and budget, remarkable, given the project commenced in March '21 at the height of the COVID restrictions and supply chain disruption, and the subsequent lawfare challenges and resulting delays. Santos' production is expected to increase by more than 30% by 2027 compared to 2024, significantly lowering unit production cost. And this will support strong free cash flow generation throughout the commodity cycle. Our updated capital allocation framework reflects our commitment to prioritize shareholder returns following the company's investment in this new production. And just as we're focused on disciplined capital allocation and maintaining a strong credit grade balance sheet, we're equally focused on costs. The foundation of our disciplined low-cost operating model introduced by Kevin when he became CEO is to maintain a competitive advantage in unit production cost so the company can thrive throughout the commodity cycle. As you saw in the open video, in 2024, Santos achieved a transformational milestone in the delivery of our Climate Transition Action Plan particularly with our Moomba CCS project starting up in late September. Moomba is a very significant first step in Santos' 3 CCS hub strategy. Moomba CCS has been very successful, having sequestered over 600,000 tonnes of CO2 since start-up at a run rate of 1.7 million tonnes per annum. And with a life cycle cost of less than $28 per tonne, the lowest cost in the world, CCS. To give you a sense of impact, it's equivalent to taking around 700,000 petrol cars off the road each year. And very soon, having passed 6 months of operation, it will generate its first revenue with the allocation of Australian Carbon Credit Units. Moomba is demonstrating our long-held view that a low-carbon future presents a commercial opportunity for Santos. Our investments in the energy transition initiatives, such as Moomba are assessed against the same commercial criteria that we use for our oil and gas investments. They must be able to generate value for our shareholders. The past year has seen a commercial carbon management services becoming a reality around the world. In Norway, the Northern Lights CCS project will commence operations shortly, annually sequestering around the same amount of CO2 as Moomba. The Northern Lights project approved by the European Union is the first project in the world, allowing industrial companies to transport and sequester their CO2 emissions. It offers a safe, reliable shipping and storage service to industrial emitters across Europe. And in response to growing demand for carbon management services, just 2 weeks ago, the project proponents approved the expansion of shipping and storage capacities to 5 million tonnes per year. Globally, the total number of CCS projects in the pipeline reached 628 in 2024, up 60% on 2023. For Australia and for Santos, this momentum presents a wonderful business opportunity. And this is why Santos is confident in our strategy to expand Moomba CCS by offering third-party carbon management services and to pursue the development of our Darwin and WA CCS hubs. This year, when we released our first integrated annual report, also covering climate and sustainability, we announced a new carbon storage growth target. Santos will aim to build and operate a commercial carbon storage business safely and permanently storing approximately 14 million tonnes of third-party CO2 per annum by 2040. We aspire longer term to store more carbon than we emit Scope 1 and 2 and equivalent Scope 3. Since 2022, Santos has invested over $740 million in our Climate Transition Action Plan, real dollars, real projects, real emissions reduction. Our company has achieved its 3 short-term 2025 climate-related targets set in 2018, and we're making real progress towards our 2030 targets. We've achieved 84% of our 2030 absolute Scope 1 and 2 emissions reduction target. We're 23% of the way to achieving our Scope 1 and 2 emissions intensity reduction target. And in 2024, our methane intensity was 0.16%, below the oil and gas initiatives target of less than 0.2% per annum by 2025. I'll have more to say on this later today when we ask you to vote in favor of the climate transition approach described in Santos' 2024 Climate Transition Action Plan and the 2024 annual report. A highlight for the Board in 2024 was its visit to Papua New Guinea in June. Our assets in PNG are truly world-class. Not only are they the jewel in the crown of the Santos portfolio, they're making a real difference to the lives of people in PNG through jobs, the activities of our Santos Foundation and the revenue that the government supports -- that the government uses to support investment in better health, education and infrastructure. In fact, since it started in 2014, PNG LNG has generated more than $7 billion for PNG and its people in the form of taxes, royalties, distribution and development levy payments. Santos and PNG LNG are spoilt for choice with no shortage of healthy upstream development options to keep our LNG infrastructure full. Front-end engineering for the Papua LNG project is ongoing and options such as P'nyang, Muruk and Juha are in the queue to sustain PNG and LNG production over the long term. Santos has never been in a stronger position to deliver value for shareholders. Customer demand for our products, particularly LNG continues to be robust, and the majority of our LNG volumes is sold under well priced long and mid-term contracts balanced with around 10% to 20% exposure to spot markets over the medium and longer term. In March, the International Energy Agency released its Global Energy Outlook for 2025, showing global energy demand grew 2.2% in 2024 with more than 80% of growth coming from emerging and developing economies. Natural gas accounted for 28% of energy demand growth with oil accounting for 11%. And energy-related CO2 hit another all-time high demonstrating why Santos' strategy to focus on decarbonizing the production and consumption of hydrocarbons is so important. I want to take a moment to address some of the feedback I've heard in recent weeks regarding share price performance. I, too, believe our stock is undervalued and it has been for some time. Of course, the last week has added a new layer of complexity with the whole stock market losing value amid ongoing volatility. However, the company is both strong and resilient, and I'm very optimistic about our future. We're just a few months away from first gas at Barossa and a year away from first oil at Pikka, which I said earlier, we'll see a 30% increase in production by 2027 compared to '24. These low-cost operating assets will also serve to reduce unit production costs, delivering increased margins and setting the company up a stable, long-term production and cash flows. We aim to deliver competitive returns to shareholders through our disciplined low-cost operating model and our capital allocation framework, and we continue to evaluate all opportunities to maximize the value accretion of our portfolio for our shareholders. On Tuesday night, Santos held its 20th Environmental Health, Safety and Sustainability Awards. These awards are a great inspiration to me and the Board, showcasing the innovation of our people in delivering safer more environmentally sustainable and more efficient operations. Also on display was the wide range of health, education and other community projects supported by Santos and the Santos foundation across our global operations. If I just look at the finalist for the Chairman's community award, they truly reflect the diversity of our company and they are a demonstration of the social impact of our vision to create a better world for everyone. They extend from a program in Alaska to ensure that no one goes hungry. To the incredible work of Dr. Julia and our PNG medical team which is literally saving lives through the detection, the early detections of cervical cancer. In the Northern Territory, a training and jobs pathway program for local Aboriginal and Torres Strait Islanders is achieving real employment outcomes for Indigenous Territorians, setting them up for a life of purpose and economic independence. And then Outback Queensland, together with the Gondwana Foundation, local landowners, and traditional owners, we're uncovering archeological history, discovering dinosaurs and preserving ancient fossils and as a result, attracting tourists to the region and bolstering the local economy. These programs and projects are truly building a better future for the communities where we operate. So to all our Santos people, thank you for your contribution and your commitment to our company and for your ongoing support to deliver Vision 2040. We have a great leader in Kevin, a really strong and capable management team and the depth of talent right across the organization. When you combine our people with our strategy and our quality portfolio of assets and growth opportunities, I believe the outlook for Santos is very bright. Finally, I thank my fellow Board members for their commitment to Santos over the past year. And to you, our loyal shareholders, for your steadfast belief in the company. I'm optimistic about our future as we continue to supply the fuels the world needs today and for decades to come. I'm confident Santos is on an upward trajectory with great assets and great people. And I'll now hand over to Kevin. Thank you.

Thank you, Keith. Good morning, everyone, and welcome to Santos' 2025 Annual General Meeting. It's a pleasure to stand before you today and reflect on what has been another year of strength and resilience for our company. But before I do that, I want to address the recent turbulence in global equity markets and the impact this is having on Santos' share price performance. The global uncertainty in capital markets is affecting stocks worldwide, not only Santos. Despite this, Santos's business continues to perform well and generate strong cash flows. With low unit production cost, Santos is not only well positioned, we're also focused on delivering shareholder returns through this volatility. We have a strong balance sheet, and we're on the cusp of increasing our production by more than 30% by 2027 when Barossa and Pikka are online. Demand for our products continues to be strong, particularly LNG, and we have Tier 1 customers who value long-term contracts for energy security. We have 3 world-class LNG projects in Australia and Papua New Guinea that are advantaged with adjacent large-scale upstream gas resources and proximity to growth markets across Asia. Our portfolio is diverse in terms of products, geographies and markets, and we have a wealth of growth opportunities for the future. So our company remains strong and resilient. And our strategy is to continue to deliver sustainable returns to our shareholders throughout the cycle. Despite uncertainty and significant challenges, Santos continues to deliver on our commitments to shareholders, customers and the communities we serve. We have done this by remaining focused on what matters most: maintaining our disciplined low-cost operating model with a free cash flow breakeven oil price of less than $35 per barrel, executing our major developments, Barossa and Pikka to bring new production online this year and next; starting up our Moomba carbon capture and storage project, a responsible realistic path to lower emissions; investing in the communities where we operate; and delivering on our promise to return at least 40% of free cash flow from operations to you, our shareholders. Santos is proud of the role that we play empowering Australia and the Asia Pacific region, supporting jobs and prosperity and contributing to national and global energy security. And today, I want to talk about our achievements and the need for sensible energy policy in the energy transition to lower greenhouse gas emissions. Because the world is going to need more energy, not less, and all energy sources will have to have a role to play, I am very pleased to say that Santos continued to deliver strong financial and operation performance in 2024. Sales volumes were 91.7 million barrels of oil equivalent with revenue of $5.4 billion. Free cash flow from operations was $1.9 billion with an underlying profit of $1.2 billion. This allowed Santos to return a total of $757 million in cash to shareholders via dividends of USD 0.233 per share. whilst maintaining a strong balance sheet and investment-grade credit rating. And just as we are focused on balance sheet strength, we are equally focused on costs. And to that end, Santos announced at the beginning of this year that we are embarking on a new cost reduction program. The program will target at least $100 million to $150 million in structural cost reduction to be realized over the next 1 to 2 years as we emerge from a period of major acquisitions, integrations and of course, as we bring our major development projects at Barossa and Pikka into operation. This work will be supported by a thorough review of our cost base across the business and the deployment of smart technology and better ways of working will be key focus areas. The foundation of our disciplined low-cost operating model is to maintain a competitive advantage in unit production costs so that the company can thrive throughout the commodity price cycle. Santos also delivered a number of key operational milestones in 2024. We made history when our Moomba carbon capture and storage project came online last September. Back in 2020, I said we would do this. We took a final investment decision in 2021, and we said it would work, and it does. The technology and reservoir is performing as expected, putting Moomba CCS on track to safely and permanently store up to 1.7 million tonnes of CO2 per annum depending on CO2 availability. At Moomba CCS, we store more CO2 emissions every 4 days than 10,000 electric vehicles avoid in an entire year. The project should provide Australia with a real confidence boost and the potential for CCS technology to help Australia achieve its decarbonization targets faster. For our investors, I should also affirm our superior position to take advantage of growing customer demand for commercial carbon management services as we pursue our third-party carbon storage growth target, and our longer-term ambition to store more carbon than we emit. Australia has a unique and natural advantage in carbon capture and storage that is complemented by a well-established, world-class regulatory regime administered by the Clean Energy Regulator. As Keith outlined, the rest of the world is investing heavily in the potential of CCS and we need Australia to pick up the pace because CCS is the one technology with real potential to abate emissions at scale. Very importantly, we made great progress in 2024 on both our Barossa LNG and Pikka Phase 1 projects, which will set the company up with stable long-term production and cash flows. The Barossa project is 95.2% complete at the end of March and remains on track for first gas in the third quarter of this year. The pipelines connecting the Barossa field to the Darwin plant are complete. And within days, we expect to complete the second installation campaign for the subsea umbilicals, risers and flowlines. Four wells are drilled and completed. A fifth well is suspended for later completion and drilling of the sixth well is underway. Finally, Other work packages are also on track to support the first gas date for Barossa LNG. In March, I visited our Pikka Phase 1 project in Alaska, and I'm pleased to announce that we have now substantially completed the pipeline 1 year ahead of schedule, with minor tie-in and punchless works remaining. Drilling at our Pikka project is progressing well with 17 wells drilled to date. The results compare favorably to pre-drill expectations with the 4 production wells tested to date, demonstrating continuous improvement on hydraulic stimulation. The highest initial 30-day production rate is 7,850 barrels of oil per day with an overall average rate so far of 6,900 barrels per day. The grind and inject facility for handling drilling waste is up and running, and the seawater treatment plant barge is being readied to leave Indonesia for Alaska in the third quarter of this year. First oil remains on track for mid-'26 with an early start-up possible but subject to weather and logistics, which will become clearer over the coming months. As Keith said, our Premier PNG LNG project is performing strongly. In November, we announced completion of the Angore project in PNG's Hela Province, which will deliver up to 350 million standard cubic feet of gas per day to support stable, long-term PNG LNG production. Angore unlocks a 1 trillion cubic feet natural gas resource to supply PNG LNG for years to come. The supply of associated gas from Kutubu through optimization of the central processing facility is also exceeding expectations, with more than 18 billion cubic feet of gas accelerated in 2024. Associated gas from Agogo and Moran fields could deliver at least another 125 million standard cubic feet per day, and we are working to make this development ready for a final investment decision by 2026. At the same time, front-end engineering for Papua LNG is ongoing and fields such as P'nyang, Muruk, and Juha also remain in the queue to sustain PNG LNG production over the longer term. This is a great position for Santos and PNG LNG to be in. We are spoilt for choice with no shortage of healthy upstream development options to keep our LNG infrastructure full. And that is the case right across our portfolio. Our 2P reserves and 2C resource position of approximately 4.9 billion barrels of oil equivalent, provides 2P reserves life of 18 years with a range of opportunities to backfill and sustainably grow in PNG, Alaska and Australia. With strong ongoing demand for our products, we will continue to develop and replace our reserves and resources in accordance with our disciplined capital allocation framework to drive long-term shareholder value. I'm very excited about our strong resource position in Alaska, which will underpin future expansion opportunities. And the scale of the Beetaloo sub-basin in the Northern Territory, if appraisal confirms its potential would be a game changer, not only for the territory, but for the East Coast domestic and LNG markets as well. With characteristics similar to the Marcellus and Utica Shales in the U.S., I am looking forward to the drilling appraisal program we're planning for 2026. We recently executed a Memorandum of Understanding with Tamboran Resources to undertake a joint study on gas export options through Darwin, where Santos has approved expansion capacity for another 6.6 million tonnes of LNG per annum. And we will continue to evaluate the potential for an integrated gas and liquids project at Dorado and the Bedout Basin, following further exploration being planned for 2026, '27. Narrabri gas, 100% of which will go to the domestic market, could solve the supply concerns of East Coast households power generators, manufacturers and businesses. It's a great project to have in our portfolio, but native total pipeline licenses and various other approvals are still being worked through. Santos will not take a final decision on Narrabri until all the approvals and litigation risks that accompanies energy investments in Australia these days is resolved. And whoever wins the federal election on May 3 must work with state and territory governments to address the quagmire of project approvals, complexity and uncertainty that are stifling investment in energy and infrastructure around the country. Another highlight of 2024 was the performance of our LNG marketing business. Long-term LNG supply and purchase agreements were signed with Hokkaido Gas and Shizuoka Gas and mid-term agreements were signed with TotalEnergies and Glencore, all Tier 1 customers. Santos' equity LNG portfolio is around 90% contracted over the next 5 years, with strong pricing, driven by the high heating value of our LNG reputation for reliability and our proximity to Asian markets, where gas demand is forecast to grow by around 34% over the next decade alone. Looking ahead, despite the challenges of the external environment, I remain optimistic and excited about the future of Santos. We have the resources, the expertise and the opportunity to lead the world in responsible energy production and emissions reduction. Our commitment remains clear: delivering safe, reliable and affordable energy for Australians and our regional partners; advancing practical, scalable emissions reduction solutions while maintaining energy security; and advocating for a policy environment that supports investment, innovation, economic growth and better living standards because the world needs more energy, not less, the energy transition the world needs is energy unleashed to alleviate global poverty, lift living standards and to fulfill human potential through the infinite computing power of AI. The modern lifestyles of the people in this room today, along with about 1 billion others across the developed world require 4 to 13x as much energy as the other 7 billion people on the planet. Those 7 billion people aspire to the lifestyles that we enjoy. They, too, want access to reliable electricity for lighting, cooking, heating and cooling. They want access to time-saving conveniences like washing machines and refrigerators, and they want access to motorized transport and air travel, yet, 2 billion people still cook over indoor wood fires, and the pollution from that activity kills around 2 million people a year, mostly women and children. So we need energy policy around the world that does not leave people behind. Energy policy focused on human advancement, and we need climate policy focused on the right problem, reducing greenhouse gas emissions, not cutting access to affordable, reliable, life-advancing energy. Too often, energy policy is conflated with climate policy, leading to outcomes that threat in both energy affordability and reliability and undermining needed investment in the energy sector. Therefore, I believe we must reconsider the current approach of merging energy policy with climate policy. However, let me be clear, Santos supports emissions reduction. We support the energy transition but it is also essential that climate policy does not overshadow energy security. A strong independent energy policy should ensure two things: domestic energy security and affordability and regional energy security across the energy consuming nations of the Asia Pacific because energy security also assures national security and regional stability. Australia's wealth has been built on these 2 pillars for decades. And they are interdependent because development of our energy resources has only been possible with capital inflows from our international customers and investors. The reality is that the world will continue to need our natural gas from both Australia and PNG for decades to come. And therefore, our focus should be and in Santos's case is on reducing emissions from gas production and its use. To governments and whoever may form government, I say, don't be misled by self-interest of false prophets, pushing unrealistic and damaging narratives that risk leaving Australians with higher energy prices, job losses and an unstable energy system. Work with us because it's the energy companies who have the balance sheets, the skills and the technology to deliver both energy security and decarbonization. To our investors, customers, employees, contractors, joint venture and community partners, thank you for your support and trust. Santos has always been and will continue to be a leader in responsible energy. Together, we can ensure that Santos remains strong, competitive, and well positioned for the future. Personally, I am energized as never before, and I'm looking forward to our next phase, which I expect will see compelling shareholder returns and balanced reinvestment and sustainable production growth. And despite rumors to the contrary, I am not planning to go anywhere anytime soon. There is still plenty for me to do. And I see the same level of energy and commitment in my strong and highly capable management team. This team is the best in our industry in this part of the world. As the company has grown, the team has evolved over my time as CEO. And while it has always been strong, I think it is now the best it has ever been, with an excellent balance of experienced hands and smart youthful talent. So thank you for your support, and I hope you all join me in looking forward to the next exciting chapter for our company. Thank you very much.

So thank you, Kevin. Ladies and gentlemen, we now come to the formal business of the meeting. I'll address each of the agenda items in turn, and shareholders will be provided an opportunity to ask questions and make comments in relation to each item or group items. As I -- as mentioned earlier, I ask that you please register your questions at the question booth in the adjoining room. After I introduce each item of business, James Murphy, who joins us in the room, will call for shareholders one by one to please move to the nearest microphone in the room to ask their registered question for the relevant item of business. If needed, a microphone can be brought to you. All questions should be addressed to me as the chair in the first instance. Shareholders are asked, requested to restrict themselves to one question at a time on each item of business. One thing I will ask of you today, please keep your questions brief so that other shareholders have an opportunity to have their say. Once you've asked your question, I'd ask that you please return to your seat. I note that we have received a number of questions from shareholders prior to the meeting. The majority of which have been addressed in my or Kevin's earlier comments. However, there's one I'll respond to before we start the formal questions from the floor. James, can you please read out this pre-submitted question.

Chair, why is the AGM not being held as a hybrid meeting?

Thanks, James. Look, the -- this topic is something that the Board has given careful consideration to and we value shareholder feedback, and we want to adopt an approach at our meeting, which encourages genuine discussion and engagement. And in our view, a physical meeting best supports this because it focuses on generating real-life discussion in the room. It also minimizes technology risks associated with having attendance on virtual attendance and voting and questions through an online platform. So we welcome shareholder feedback on the format of the meeting, and we'll take this into account when considering the appropriate format for the meeting next year. However, for the reasons I've outlined, this year, we determined the most appropriate format for the meeting was a physical meeting. That said, we've also sought to provide ways for shareholders who are unable to attend and participate in the meeting. We've given you the opportunity to participate where practical by providing an opportunity to watch the meeting via our live webcast and to engage with us by providing questions in advance of the meeting. We'll consider -- we'll continue to listen to shareholder feedback, and then we'll consider this when thinking about the format of our future AGMs.

We'll now move to the first item of business. The first item of business is to receive and consider the financial report, the directors' report and the auditor's report for the year ended 31 December 2024. I now lay before the meeting the financial report, the directors' report and the auditor's report for the financial year ended 31st of December '24. I note that there's no formal resolution for this item of business but rather this provides shareholders with an opportunity to ask questions about the reports and the management of Santos Group and its operations. Shareholders may also ask questions of the auditor relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted in the preparation of the financial statements and the auditor's independence. We have received a written question for the auditor, and I'll ask the auditor to respond to this question shortly. The questions included in the auditor's question list, and a copy of the list is available on request at the registration desk. James, please read out the question received.

Chair, in February this year, Woodside revealed a larger-than-expected price tag for restoration work ranging between USD 700 million and USD 1 billion for 2025. This announcement took analysts and shareholders by surprise. How have you integrated the restoration provisioning in Santos' financial statements to safeguard against the possibility of similar surprises for Santos' investors in the future? The Santos 2024 annual report, list restoration provisions as current USD 320 million and noncurrent a much larger USD 3.826 billion. How have you assessed the appropriateness of the company's categorization of current and noncurrent provisions in order to make the assessment that the financial report as a whole is free from material mistake. Note 3.5 to the Santos 2024 consolidated financial statements states that the group's estimated future removal and restoration costs may include certain major pipelines remaining in situ where the group believes it will result in better environmental and safety outcomes than full removal, and that will be satisfactory to the relevant regulator and the regulator's compliance obligations. Given Australia's decommissioning regulatory environment, when no pipeline has been approved to remain in situ and the growing body of regulatory decisions have required pipeline removal. How did the auditor determine for the purposes of the Australian Accounting Standards Board 137 provision contingent liabilities and contingent assets, paragraphs 48 to 50, that there was sufficient objective evidence that the regulator will permit Santos to leave these pipelines in situ? What audit procedures were undertaken to ensure provisions in relation to decommissioning of the Bayu-Undan pipeline are accurately stated and comply with relevant accounting standards? How much has been provisioned for decommissioning of the Bayu-Undan pipeline? What year is it assumed decommissioning of the Bayu-Undan pipeline will commence, what discount rate has been applied? Are all of the assumptions and public statement used for future capital expenditure across activity types being applied consistently? For instance, future carbon capture projects are seemingly being used as a rationale to delay decommissioning, expenditure and maintain asset values. Are the assumptions for the carbon capture time lines and associated expenditure aligned in reality with the assumptions for the decommissioning time lines? Within the oil and gas sector, many smaller operations that have acquired assets have agreed some level of retention of decommissioning liability with the seller. Does Santos have any retention of decommissioning liability with any assets it has divested over the years? What specific audit procedures were conducted to ensure any retained liabilities are accurately reflected in the restoration provisions in accordance with AASB 137? And what specific audit procedures were conducted to ensure restoration provisions are accurately reflected for activity where Santos is a nonoperating joint venture partner?

Thank you, James. So look, I'll let the auditor represented by Darren Lewsen address the parts of the question related to their procedures, and I'll come back and address the remaining queries.

Thank you, Chair, and thank you, Ms. [indiscernible], for your questions. Note 3.5 to the financial report outlines the company's accounting policy and the significant judgments considered in the consideration of the restoration provisions. And our audit report specifically the content of the report on Pages 286 and 287 of the annual report describe why we consider the restoration provisions to be a key audit matter. And we describe how our procedures address that key audit matter. We list a number of specific procedures that we performed and Ms. [indiscernible], many of your questions are addressed by that listing of specific procedures. Now the company's assessment of the most likely method of decommissioning is based on a detailed probabilistic assessment of each major item of plant within each project. And that assessment considers regulatory requirements, ongoing dialogue with regulators and of course, the consideration of both local and international president. Specific to your question in relation to decommissioning in situ of certain major assets, certain major pipelines. To assist the users of the financial statements, the company disclose the quantified impact of that judgment. And importantly, the restoration provisions recognized in the annual report reflect the company's best estimate of the expenditure required to settle those obligations. And as stated in our audit report, I'm happy to reiterate at the meeting today, we consider the restoration provisions recognized to be reasonable and in accordance with the requirements of the accounting standards. Thank you, Chair.

Thank you, Darren. So the questions for the company, I think, seek to understand the appropriateness of the company's restoration provisions. Specifically, when taking into account assumptions regarding the future renewal and restoration costs, CCS projects and other judgments or estimates. As EY noted, Note 3.5 of the 2024 financial report sets out the company's accounting policy in addition to the significant judgments considered as part of the restoration process. Importantly, the amount recognized as a restoration provision reflects the company's best estimate of the expenditure required to settle the present obligation at the end of the reporting period, and that's in accordance with the accounting standard requirements. With respect to our CCS plans, until a CCS project achieves FID, an investment decision, we don't factor CCS into the restoration provision calculations. That means, say for the Bayu-Undan project, the provision is based on restoration commencing at the end of the assets producing life. We aim to be transparent regarding how we've determined the company's best estimate of expenditure required and we do so in accordance with the accounting standard requirements as disclosed in Note 3.5 of the financial report. James, do we have any further questions on this item?

Chair, the first question comes from [ David Hansemann ]

Thank you, Mr. Chairman. And congratulations on limiting questions to a single question. So many meetings of Santos have been quite prolonged, so I congratulate you, but I should also like to mention that sometimes short speech is given in the form of a question. And one way around this would be to limit these to a maximum of 2 minutes. Thank you.

Thank you for your observation, David. James, next question?

Chair, the next question comes from [ Karrie Lynn ].

Thanks, Chair. Yes, my question is relating to the fact that Santos is currently facing a court case related to greenwashing. Since last year, the company has lost 3 Board members with primary skills in climate change and energy transition, given the ongoing court case and the existential threat of climate change, is the company concerned that its what skills in this critical area have gone backwards since last year?

Thank you for your question, Karrie. Look, firstly, with regarding the greenwashing, I can't make a comment on that because it's before the courts, and I think you understand that. In terms of the Board, Yes, there's been a very conscious renewal of the Board. So there's a process of renewal that goes on continuing with boards where we look at the skills requirements we have. Very specifically, recognizing the directors that were retiring, the Board set out to find directors with the right skills, including in those skills, directors with transition, energy transition skills. So look, I'd point probably specifically to John Lydon is someone who we actually targeted very specifically because of his great depth of knowledge in that particular area. As a result of the recruitment we've done, we reassess our skills every year. And in fact, our assessment of the Board's skills actually is that at the depth of our strength in the whole area of climate energy transition, innovation, business transformation, et cetera, has actually strengthened. And I think if you compare the Board as it stands today with, and shown in our annual report, the Corporate Governance statement and you compare it with the previous one, you'll see that. Thank you. Next question James?

Chair. The next question comes from Michael Davey from ASA.

Thank you. My name is Michael Davey. I'm representing the Australian Shareholders' Association, together with my colleagues, James Hahn and Greg O'Connell. Firstly, I'd like to say what a wonderful report that both you Chair and the Managing Director gave. And in fact, you've preempted most of the questions I was going to ask. Even Mr. Gallagher preempted the one I was going to ask about his future. But I do have one question, and that's about what factors affect franking credits? And when will dividends to Australian shareholders be franked?

Thanks for your question, Michael. Look, as you'd be aware, I mean, really the key factor regarding franking -- yes, our franking credit counts at the moment are not at a level that can sustain franking. So really, this is about production coming online in Australia and really that points to the Barossa project. So when the Barossa project comes online and depending on commodity prices over the next few years, that would determine the timing. I think indicatively, you can say it will be a few years. But the precise kind of timing of that will depend really on the commodity prices and therefore, the revenue and the taxes, et cetera, that are paid by that facility. But it's all very much about Barossa starting. And then basically, the revenue that comes from that. Thank you. James?

Chair, the next question comes from [ Chris Warren ]

Thank you for the opportunity to ask a question, but my questions have already been answered by the auditor. Thank you.

Okay. Thank you, Chris. James, next question?

Chair, the next question comes from Lee White.

Lee White is the name. Here in the meeting that we [indiscernible] to buybacks even. And so how's all that work or just maybe b*******.

Sorry, I didn't quite get all the details I was really -- I hear is about the b*******.

We hear about we sell this gas overseas, then we buy back cheaper. Is that true or just b*******?

That's certainly something that we don't do. There is a lot of debate about to meet the potential future shortages. I'd say that people are considering that people might be buying gas back. Our gas all goes to our customers in Japan and in Korea. Some go to China, some go to other places. But all our products are sold to customers internationally. And we then also have domestic gas that we sell on the local market. So no, none of our gas does that.

LNG import terminals in.

Good question. I couldn't agree more. Kevin, do you want to say something about that?

Yes. Look, I think the charge for Australia, as I alluded to in my speech, is by not having clear energy policy that supports the development of the hundreds of years of gas reserves we have in Australia right under our own feet. The reality is if we don't do that because the country still needs gas, they will end up buying it from other markets overseas and importing it and paying a much higher price for it. And that is what you are reading about. It's not -- I won't use your descriptor using the microphone here, but it's not the descriptor that you used because it is real. It's a real risk for Australia, in my view, if we don't develop our own resources. We have hundreds of years of resources here in Australia. By not developing those, Australia will not stop using gas. It will just buy somebody else's gas at a much higher price. And that gas will probably come from America, Russia or the Middle East, but there is no future with no gas. So thank you for your question.

Thanks, Chris. James, next question, please?

The next question comes from Michelle [indiscernible].

I'm [indiscernible], traditional owner, registered nurse and New South Wales Nurses and Midwives Association member. Country speaks to us. We need to speak up for country. The 237 years, people have been taking from our country. I was born in 1966. I was parented under the government's control and policies. We were not seen or heard and we made to think that we are the problem. This continues today. I'm an aboriginal registered nurse. We are a people that have practiced reciprocity for tens of thousands of years. Mining operates on an extractive model, often viewing the land primarily in terms of economic resources. Mining disrupts sacred sites, waterways and ecosystems that are integral to Aboriginal reciprocal cultural and spiritual practices. We are not the problem. My ancestors have been here for tens of thousands of years. Santos has been here for 71 years. We are not the problem. Santos takes from our country. Where is Santos' accountability around the harm to our communities and health? Is Santos disclosing the harm to communities and the ongoing health impacts to shareholders? Thank you.

Thank you for your question. I think let's talk about from the Gomeroi perspective. We have been in formal negotiations with, or sorry, engaged with Gomeroi people, I guess, since we first acquired this project back in 2012. And we've been in formal negotiations with the Gomeroi since 2015. We have good support, I think, at the local community level, but there are differences of opinion, of course, like all communities within the Gomeroi. We've had the Gomeroi involved with every stage of the cultural heritage management plan and the cultural heritage surveys that have been going on out there. We continue to work constructively with the Gomeroi people to ensure that their heritage is protected and that they benefit from the project. The Future Determination Act for the grant of the petroleum leases is currently before the native title tribunal, and I really, I can't make any further comment on that. Well, I can say that I hope through some of the conversation that we've had today, you've seen that this is a company that genuinely compare -- that genuinely cares for the communities that it works with. And I think as a nurse, if you saw some of the things that we're doing in Papua New Guinea, for instance, you would be feeling quite differently towards us. We are really passionate. One of the things we want to work and live in the communities that we -- where our operations are, and we want to make a difference to the qualities of those communities. So if that gives you some assurance, I hope that's the message you take away from this. We are very genuine about our engagement with the Gomeroi people and the difference that we think we can make as a member of your community. Thank you. James?

Chair. the next question comes from Deborah Briggs.

My name is Deborah Briggs. I'm an emerging owner from the Narrabri community. My question is Santos says they have a respectful working relationship with Gomeroi people, especially with claim group members who belong to the Pilliga Forest where the Narrabri gas project is being forced onto our property. This isn't true or correct. Santos states they respect the opinion of individual Gomeroi and that of us as a collective nation. This also isn't true or correct. My family and I can no longer practice our mutual beliefs in our cultural practices within the Pilliga forest due to the ongoing harassment, intimidation and intrusion of our privacy due to Santos' security, which includes their live video cameras set up all over our forest. Santos may have a working relationship with native Gomeroi applicants but they have no dealings with whatsoever with the other 10,000-plus Gomeroi peoples. The applicants have failed to inform Gomeroi, in which -- sorry, the applicants have failed to inform Gomeroi, which we cannot make possibly. Sorry, I mixed that, so we can't make an informed decision because nothing has come back to the community. Would Santos please advise me how this is meant to be a respectful working relationship with Gomeroi people. Thank you.

So I think I've sort of outlined how we've tried to engage with the Gomeroi people through the applicants. But we're also engaged with the local community. We have a presence in the town. We have offices. We have our own people there. They're meeting with the community on a kind of regular basis. So there are avenues like that to engage as well. I'd encourage you to if you're feeling the need for more information, there's information that can be provided through those channels. Perhaps this is something that we can talk with perhaps a little bit at the end of the meeting, if you would be up for that. Thank you. James, next question?

Chair, the next question comes from [ Donna Kenny ].

I'm also a Gomeroi [indiscernible]. I'd like to ask to Santos have Gomeroi native title applicants under regulatory capture by way of nondisclosure agreements with the Gomeroi applicants, preventing them from fulfilling their obligations both legally and culturally to fully disclose all dealings between Santos and the applicants? Is this why we get no information from the applicants? Or is this a failing on the behalf of the applicants?

You know the details of this more than I do, Kevin. So maybe you could cover that.

The specifics of any agreements, but what I would, I can say with absolute confidence is there's no way that Santos would not want the applicants to be communicating with the communities. We would want that. We would encourage the information flow. So I'd be comfortable to say that there's no way we would put anything in place that would block the communications that we would want to go back to the communities. I can't comment on whether the applicants are doing a good or bad job on that because I just can't comment on the applicants themselves. But we would not have any restrictive practices or agreements in place with any of the applicants.

James?

Chair, the next question comes from Raymond Weatherall.

Raymond Weatherall, Gomeroi. I was an applicant from 2015 up until you put in the Future Acts Determination Application in regards to the Narrabri gas project. Was done under duress. It was during COVID when we were forced into a native title meeting. We voted 162 to 2 against your proposal and the Narrabri gas project. I asked a question to your shareholders, if you voted 162 to 2 against, how would you feel if it was taken to the National Native Title Tribunal, as an example, where you've appealed it, and showed total disrespect and disdain for the Gomeroi people, where your lawyer even stated that we haven't even got our determination yet, and total disrespect in regards to our culture and heritage and the Gomeroi people. My question is, what are you just going to leave because the Narrabri gas project is a dead duck? Thank you.

Thank you for your question. Look, I mean, 162 to 2, that doesn't sound like a very representative group. I understand that Gomeroi people is a very large group of people and...

Well, obviously, during COVID, people were restricted. So the 162 to 2 that went there felt the need that they had to go and vote. So we voted against it. Most people that were there, 162 to 2, and there were 2 abstentions.

Okay. Well, I guess we've been through a process of negotiation over a number of years. At a point in time, the legislation, the way it has been set in Australia, is there is an independent judge, if you like, the tribunal, that then come in and actually make a ruling. We're waiting for that ruling to be remade, and we'll see what the outcome of that is.

Well, obviously, there was an initial ruling made and that was appealed by the Gomeroi, where climate change was put on the table for the first time in any situation in Australia in regards to Native Title. We as Gomeroi people have always opposed it. Obviously, with Santos making donations to the LNP, having the New South Wales state government sit with you in court against the Gomeroi people, everything is against us, but we shall not go down without a fight.

Thank you. I think you've made your point well, and it's with the tribunal, and we'll see where the tribunal take it. And then, what I can reassure you, Raymond, whatever the tribunal decides, it doesn't change our desire to engage with the Gomeroi people to find a way through this, and we'll continue to do that no matter what the finding of the tribunal will be. So thank you, Raymond. James?

Chair, the next question comes from Kinchela Karra.

[Foreign Language] I'm Gomeroi Traditional Custodian from Narrabri. I know firsthand the impact that Santos has. I know firsthand the impacts that mining companies have as we've had Whitehaven and the negative impacts in our communities as well. My question to Santos is that Gomeroi native title rights and interests are currently in the Native Title Tribunal. Has Santos assessed the social, environment and health impacts that the Narrabri gas project will have on the Gomeroi people and the Narrabri community that includes the cost. And can you promise to support Gomeroi people no matter the outcome of the tribunal? And also just reiterating the free prior and informed consent that can Santos say that free and prior informed consent has been made from not only Gomeroi people, but the Narrabri people as well and that they have full understanding of all the impacts of the Narrabri gas project?

That's a lot of questions there. Let me just start with your first point. I mean, you've said you know the impact. I think I can say as well from visits, and I think the whole Board can say from the visits we make to various locations, we know the impact that we make on the communities in the areas that we operate, and we're actually very proud of that. We're a positive force for good in these communities. So...

How can you say that when we are standing here today? Sorry, but that's not true.

One question at a time. Can I please respond to your question, if I can? So you say it's not true. I'm going to look through my own eyes, the same way that you are, and say to you that in the places I visit, for example, in Papua New Guinea, for example, in other locations around Australia, where we have 23, I think, agreements with other native title groups. We work with 6 landowner groups. We have 71 agreements in place with various native title groups around the countryside. We have very harmonious relationships in those places, and I see the benefits of our activities in those communities. So I think that's just a point that I can make. And you have your own views. I respect that. I'm looking through my eyes and seeing what happens elsewhere we operate, and I'm very proud of the things that we do.

[indiscernible].

Sorry, I can't hear you.

I said, are you -- do you -- so you agree that you are causing conflict in our communities and between our First Nations people and groups?

Again, I talked about the agreements that we have...

And you [indiscernible].

Sorry, you've made your point. If you would allow me to respond, that would be helpful.

[indiscernible].

Yes. Well, that's your view of the world. My view of the world is what I see.

You're a part of that community.

I'm not part of your community. I'm talking about other communities that...

[indiscernible].

Okay. Thank you. Let's move on, James. James, next question?

Chair, the next question comes from Peggy Smith.

Thank you, Chair. I'm a registered nurse, and my question was, in Australia, fossil fuels are estimated to contribute around $2.5 billion annually in health-related costs. How does Santos plan to offset the public health costs attributed to its operations? And what specific strategies or initiatives do Santos have in place to mitigate these impacts and ensure that the burden of health cost does not fall on local communities and taxpayers?

Well, I think in answer to that, I'd talk about the impacts energy has in terms of developing and emerging economies. And when I look at places like Papua New Guinea, in Australia, if I talk about -- let's talk about children of the age of 5. I think the death rate in Australia is 5 children die per 1,000 children born. In Papua New Guinea, the number is close to 40. The impact we have with the revenues -- the presence that we have in Papua New Guinea is making a genuine difference there to survival rate of children. We're bringing energy, and we're bringing services like water, like hygiene, like nutrition to some of these areas of Papua New Guinea that don't have access to that. So I think we can sit here very comfortably in our little Australian world with our, as Kevin said, 13x more energy than the rest of the world. But I think it's really important to consider that our footprint is a much more global footprint, and we are making a genuine difference across our operations. And it's having a real impact on the health outcomes for people across our operations.

Do you mind if I just add. As part of my work, I do work in an area that relies on fossil fuels. And it's a very regional community. We don't have much access to health services. So every time we see an increase to COPD, a toddler having an asthma attack, we have to airlift them out and sit there with their parents wondering if they're ever going to see that child again. So there definitely is some very real negative health effects that come from the fossil fuel industry. It's not just financial. It's really horrific. It affects my workload. So just curious as to what Santos is...

Thank you for your comments. And I think we understand that there are statistics, global statistics, and I don't want to particularly get into that, but there is all sorts of benefits from energy. And I think that's as well as whether there are negatives or not. Kevin talked, for example, of the fact that something like 2 million people a year are dying because they're having to cook internally in little wood fires and that the pollution that, that creates is having kind of a massive impact around the planet. So we can talk very specifically or we can talk in general terms. I do think that the sort of things that we're doing are making a real difference to the quality of life. And I talked about New Guinea. The money that has been going into New Guinea, for example, from our PNG operation, the billions of dollars are making a real difference to the quality of life of people in PNG. So I stand behind that. Thank you. James?

Chair, the next question comes from Theresa Roberts.

[Foreign Language] My name is Theresa. I'm a Gomeroi [indiscernible] I live in Narrabri. And my questions today are in regards to water. And I realize I'm just listening to everybody here. And I know that as a country, we have need for energy. But I think that water is such a misunderstood -- I'm just saying, I'm listening to what everybody else is saying. I'm just going to quickly address that. With Australia's need for energy, water has the power to do all that, and it has the power to do all that in a way when it doesn't harm anybody. There is no detrimental come offs from using water as energy, and water has the power to do that. So I think we need to be investigating these kinds of things, because all the energy that the whole entire world is using is explosive energy and water is implosive energy. Explosive energy is finite, implosive energy is eternal. We as a whole human race have the opportunity to step into areas where we can access eternal energy, free energy from water, okay? So I just want to say that. And there is a lot of evidence, a lot of studies, just Google it, seriously. And then I'd just like to say, now I get to my question. We the Gomeroi demand answers as to why Santos can't even provide us with up-to-date current water monitoring data? So are you aware that the bulk of your water monitoring data, specifically in regards to your groundwater monitoring, which is our great Artesian Basin. And once again, I'll reiterate, we know the value of the energy to gas, but water outweighs that. We are water. We need water more than we need gas. So the bulk of your data on your Santos Water portal that's accessed through your website. The bulk of that data is dated at 2015 and 2017. You've just brought online a couple of water monitoring points. You've got like Dewhurst 35, Dewhurst 43, that you've got there, and what's the other one, I think it's [indiscernible] something. And you're just saying you are decommissioning Dewhurst 35, but you have drill rigs out there on site. Water monitoring infrastructure is very, very different than a core hole for gas production. Where the transparency? We don't know what's going on. As well as having representatives who are sitting up in these community groups and water groups and that with you, we don't know anything. I've got to go online to the Santos portal, Santos website and read through your minutes and try to work out what's going on around the country, because when we're out there in the Pilliga, we're being stalled and harassed. And when we say like we want to go and have a look at [indiscernible], go down and do water ceremony, there's fencing and there's people there and just we can't get any access to these sites. And then I just -- so we're just demanding more accountability and transparency around Gali, because Gali is water. That's the Gomeroi word for water. And Gali is our first ancestor, our water. And we're seriously looking at avenues of contacting the natural resource access regulator to have a look into all this stuff, what's going on with water, because we can't get any information.

Look, it's not something that I can actually respond to you. It's a very operational question. So can I suggest that this is something that we could respond to you separately behind this and find out if the data is out of date and how we can provide more information, et cetera.

[indiscernible] It's our place. It's our land. It's our ancestral inheritance, and we want to know what's going on there. [indiscernible].

Understand. Yes, I know. You've made your point about that. I will follow up with Kevin and will -- do you want to...

Teresa, wasn't it? Yes, sorry, Theresa. Look, thank you for the point you made. I'll be very happy to work with you to share some of that information and to help you to understand what we do across those spaces. What I will say, on your point very briefly on water, I take it you're referring to hydrogen that comes from water. And we have spent a lot of money. Again, without going into it here, we can share information with what we've done in that space. Once you make the energy from it, though, just to be very, very clear, it's very explosive as well once you create that form of energy.

[indiscernible].

Okay. Well, maybe you can educate me on the other forms. Okay. All right. We can talk about that offline. Very happy to do that. And I'm always very happy to find new sources of energy, I can assure you. And on the other couple of things I want to make a point. One of the reasons we have the security we have around Narrabri is because of activist vandalism. And I just want you to know that -- so we have to protect our facilities because we can't just let anybody go in there and access gas pipes and things like that.

[indiscernible].

And I was just about to say, and to protect from wildlife arriving on our facilities. And if I could just finish the other point I want to make for you as well is that on the regulatory standards, what I can say, and this is for everybody's benefit in the room, if Narrabri project ever goes ahead, it's the highest water monitoring and reporting standards in the world. There is nowhere else in the world that would operate to such high standards, and I'm very comfortable with that. Yes. Yes.

[indiscernible].

But the offer is there if you want to find out more information, the offer is there.

[indiscernible].

Thank you, Theresa. I think you've made your point, and I think Kevin will reach out. Okay. Thank you. James?

Chair, the next question comes from Kevin Condron.

Chair, shareholders, a quick question. Thank you for your time. After 13-plus years of a long expensive battle about saying no, and we'll continue to, I want to know what efforts you will be putting in place to protect wildlife in Pilliga?

I'm sorry, I didn't hear that question.

What efforts will you be putting in place to protect wildlife in the Pilliga, after 13 long expansive years of battling...

Do you want to do that?

I just think all I would say is all the details of plants, whether it be for fauna, flora, et cetera, are all in our EIS and our development plans.

James?

Chair, the next question comes from Jeff Donnell.

Part of my question was answered earlier about the tax. But on page, what was it, 157 of the annual report is one place where I found that Santos actually pays tax. And according to this, they paid $485 million in tax. Who did you pay it to? And in regards to franking credits, where did it go? So why haven't we got any refund back to the shareholders in franking credits over a significant number of years? Santos doesn't seem to pay. And that's the only pay I found in the whole report that I tried to read where it actually shows how much tax you actually have paid. I don't mean just in Australia, I guess, it's across the world I guess that figure is.

So I'd refer you to our annual report that we generate on sort of tax. We published our tax payments across the world on a document that's on our website. So it's there for you to sort of see. Last year, I think we paid $711 million in royalties, excise, and royalty related taxes and income taxes in 2024. So that information is there for you to see on our website. So I suggest that that's a good source of information for you.

This says taxation expenditure of $485 million, which was up from $403 million from last year. And it's actually on Page 157. So I have actually read that in your report. So my question still stands, where is the franking credits belonging to that?

Well, we need to be generating more revenue. And that's the comment we made earlier about when the Barossa project comes on stream, revenue will increase significantly, and you can expect some time after Barossa comes online that we will be generating tax credit, if you like, franking credits, but it will be several years. Thank you. James?

Chair, the next question comes from Michael Davey from the ASA.

[indiscernible]. Thank you very much.

Thank you, Mike. James?

Chair, the next question comes from Robert Ferris.

Thank you. My question is about young people. International surveys show increasing levels of emotional distress and anxiety about climate change in young people. Of 1,000 young Australians recently surveyed, over half, 53%, were either extremely worried or very worried, and 1/3, 32%, said that their anxiety and distress impacted their day-to-day functioning. I understand that at least 34% of Santos shareholders are aged 60 years or older, certainly includes me. With Santos continuing to undertake new large gas production projects in the face of the International Energy Agency asserting that no new oil or gas production can occur if the world is to achieve net zero by 2050, my question is, why would, why should young people become the shareholders of the future and accept your positive assertions about CCS in the face of widespread doubts about its cost and scalability and become those shareholders of the future, shareholders presumably necessary to sustain the company in the medium to long term? Thank you.

Thank you. Let me start with your comments on CCS, because that's something that I follow very closely. And as I said, there was, last year, a 60% increase in the number of CCS projects in the pipeline. Last year, there was an increase from 40 operating projects to 50. There was an increase in the number of projects that are physically being constructed at the time. And in fact, Moomba was one of them. The number grew from 11, I think, in 2023, to 44 in 2024. The world is waking up to the power of CCS and to the viability of it. I mentioned in my speech earlier, the Northern Lights project, which is a commercial carbon disposal operation that's putting CO2 and sequestering it in the North Sea at an economic rate. Customers are buying a service. That's our vision. We're going to decarbonize our own products, but we're also in that process going to be offering carbon management services to our customers and to our gas customers and to others. And we can help industries like the steel industry, like the cement industry, to decarbonize their products. Now I think that's a really noble ambition for a company like Santos to have. We have the ability, the skills that we have in our general -- in our routine oil and gas operations transfer directly to the CCS space. This is a natural extension of our business, and we see a massive opportunity. Australia has gas, and it has great carbon storage potential. So for Australia, this is a massive opportunity. And I think a company just recently, Wood Mac did an estimate and they estimated something like a $600 billion worth of revenue potential from CCS for Australia. So I'd say if you want to get behind a company that's actually really trying to do something in this space and to decarbonize this product, but actually help others to decarbonize, Santos is actually a really good company to invest in.

Can I just mention briefly then, you mentioned a figure of $28 per tonne for the Moomba CCS carbon storage. Only last week, 10 days ago, in an interview with the Australian Financial Review, the Chief Executive Officer of Woodside said that CCS is basically not available to Woodside to decrease its carbon emissions in any big way, because it's way too expensive. And she quoted a figure of between USD 200 and USD 500 per tonne as the reason why it isn't available at the moment. I can't square that $28 with a figure that's nearly 10x higher. Can you?

That should help you decide which shares to buy then, shouldn't it? Thank you.

Sorry?

That should help me decide which shares to buy.

I mean, I can reconcile that. Our real competitive advantage in this space is we're able to repurpose infrastructure that we already have. So in the Cooper Basin, for instance, we have camps, we have roads. We have reservoirs that are depleted that we know intimately. We're able to do this thing really cost effectively because we have a presence in these places already. And we have reservoirs, we have facilities and things that we know really well and can use. And that gives us a massive competitive advantage in the space. So look, I understand the cost really clear.

Look, all joking aside from the comment earlier, but the reality is that every project is different. And we are very fortunate at Santos that we have a. comparative advantage in this space, particularly around our Moomba facilities, because we've been operating there for over 60 years, we have depleted reservoirs, we have a lot of infrastructure in place, which allows us then to convert to CCS at relatively low cost compared to offshore or greenfield developments. And that is really what is driving those huge cost differentials between our project and some of the other ones that you've been quoting.

James?

Chair, the next question comes from Munira Chowdhury.

Thank you, James. It's Munira Chowdhury. Chair, you mentioned long-term LNG demand growth in the Asia Pacific as well as emerging economies. And we see a continuation of this over the last few years as well. Is this demand growth a result of a large-scale rollout of new baseload gas power in these regions? And if that's a yes, which are the countries and markets specifically that Santos is counting on?

We're very much an Asian-facing organization. And so countries in Northern Asia particularly is one of the areas we currently supply. What gives us confidence in this is certainly the sort of forecast for growth, but we have a fabulous competitive advantage in Australia in the shipping distance between ourselves and our sort of near Asian buyers of LNG is only 8 days. Gas that comes from the Middle East, gas or LNG that comes from the Middle East and from the U.S. are over 21 days. So that shipping advantage, the cost advantage that, that presents, but that's actually also an emissions advantage with less shipping time, it really makes a big difference and makes us very competitive in those markets. And I think Kevin talked earlier about some of the premium customers, the Tier 1 customers that we're able to attract to our gas, and that's because of those sorts of advantages.

I would like to know which specific countries that you're counting on for the long-term LNG growth? I understand in North Asia, you mean -- I'm assuming it's Japan and Korea at this moment. But in terms of long-term LNG demand growth, which are the emerging economies that you're thinking about?

Well, I can tell you about the long-term contracts we have at the moment. We have long-term contracts with Japan and Korea. And Malaysia, sorry, I should add, yes. Next question, James.

Chair, the next question comes from [ Vern Cadman ].

Thank you. This question relates to PNG's LNG project. So 10 years after PNG LNG's first gas, the PNG Minerals Resource Development Company reports that some landholders have still not been definitively identified or received payment. This appears to be a violation of indigenous people's right to free, prior and informed consent. No landholder would consent to not being paid to have that right. So my question is, how is Santos managing the risk that its current PNG LNG operations maybe operating in violation of free prior and informed consent and indigenous rights under human rights law in relation to required payments potentially not being made?

Well, first, let me assure you that we have made all the payments that have been required to be paid and met all those obligations and all those payments typically go through the government. So if there's some disconnection there, that's potentially where it happens. I can also say that the relationships that we have on the ground with the communities where we operate is extremely positive. So I don't think that your issue is really translating to our operations.

It's interesting then that the PNG Minerals Resources Development Company, which I understand is the kind of mechanism for making payments, is reporting that they haven't been able to identify some landholders. So I mean, I'm asking the question to understand how Santos is kind of doing your due diligence around this.

That is a question for the MRDC. We've made all the payments that we were obligated to pay and more. And look at the joint ventures that are in this, we have highly respected international companies working with us here as well like Exxon. The payments have been made. I know that for a fact.

All right. Is this something that I can follow up with someone after the meeting?

Yes. Absolutely. James?

The next question comes from [ Andrew Zhan ].

Thank you, Chair. Günther Thallinger chairs the Investment Board of Allianz, one of the world's biggest insurance companies. He said recently that due to climate heating, the world is approaching temperature levels where insurers will no longer offer cover for many climate-related risks. To state the obvious, if equipment, operations, and projects are uninsurable, they're simply not viable. Risks of fire, flood and storms are increasing in the region of the Pilliga forest, where Santos' expansion operation includes gas fields, infrastructure and a major pipeline project. Even the local fire services have ruled they will not attend fires there due to increased risks of gas explosions. My question is, how will the anticipated lack of insurance cover impact the Santos' Pilliga operation? And how have you factored this into the company's future plans and investments?

Thank you. Well, first thing to say is, look, we do maintain our sort of insurance program in line with our risk appetite. We utilize global markets to place our insurance coverage, and we've had no issues with that, quite honestly. So we are very comfortable that we can access insurance for our assets. We have, and we continue to maintain at a level that we are very comfortable with. Next question, James?

Chair, the next question comes from Claire Cook.

The Papua LNG project website doesn't provide copies of community information materials that show communities have been informed of their rights in accordance with the Equator principles and the International Finance Corporation Performance Standards or comprehensive information about the project's climate, biodiversity and human rights risks. All of this is required to achieve informed consent. My question to the Chair is, has the Papua LNG project failed to make these materials public because they do not exist? And does this mean that the project cannot show evidence that communities have been properly informed of their full rights and risks?

I'm not sure I can actually comment on the Papua LNG operations. Kevin, I know you're aware of -- it's not something I can comment on here. We can follow that up for you, and we'll let you know. But we're not the operator of the Papua LNG project. We're in the venture. But normally, the organization facing the public is the operator, and that's Total. So we can follow up with them and just see where that's at. Next, I think it's the last question coming up, James. Is that right?

Chair, this is the last question, and it comes from Chris Warren.

Thank you for the opportunity to ask this question. Earlier this year, it was reported in the media that workforce has been deployed away from the Bayu-Undan CCS project and that the project is likely to be unviable because of competition with an IPCC CCS project. Are you still progressing with Bayu-Undan CCS in light of recent comments from Woodside CEO that offshore CCS is financially unviable?

I think we've just had a long discussion about the viability of CCS. And I think we've made very clear and Kevin made it very clear in his presentation, we are pursuing a 3-hub strategy. Bayu-Undan is very much part of that vision. We've spent something in the order of $38 million on the front-end engineering and design of that project, which is still not complete. And we're working with the [indiscernible] and the Australian government to put the necessary regulations and framework in place that would enable the transfer of CO2 to the facility. So yes, the project is very much a focus of our attention.

All right. So there being no more questions, James, we'll move to the next item of business, Item 2, which is the reelection of directors. And I now turn to Item 2a relating to the reelection of Mike Utsler. Mike was appointed to the Board on the 3rd of May 2022, and he's the Chair of the People, Remuneration and Culture Committee and a member of the Audit Committee. Now in accordance with the constitution, he retires and being eligible, offers himself for reelection. The Board, with Mike abstaining, recommends that shareholders vote in favor of Mike's reelection. Shareholders will have an opportunity to ask questions in relation to Mike's reelection at the end of this item of business. I turn now to Item 2b relating to the reelection of Musje Werror. Musje was appointed to the Board on the 17th of December 2021, and he's a member of the Audit and Risk Committee and the People and Remuneration and Culture Committee. In accordance with the constitution, Musje retires and being eligible, offers himself for reelection. The Board, with Musje abstaining, recommends that shareholders vote in favor of Musje's reelection. I'll now invite questions in relation to the reelection of Mike and Musje. James, are there any questions?

Chair, there are any questions on this item.

Thank you. The results of the proxy voting -- sorry, I was thinking -- I just looked up. There it is. The results of the proxy voting for the director reelections are now shown on the screen behind me. The proxy results indicate that each of these resolutions will pass, and I congratulate Mike and Musje on their reelection. I now move to Item 3, the remuneration report, and this item of business asks shareholders to adopt the company's remuneration report. I personally would also like to thank shareholders and other stakeholders for their feedback on our remuneration framework as part of our commitment to ongoing improvement in and the transparency of our remuneration report. We believe this year's report clearly demonstrates the alignment of total remuneration outcomes with the company's performance and shareholder value creation. The Board is committed to a proactive approach, engaging with shareholders in 2025 to continue to address remuneration queries in a transparent manner and ensure that we have a robust framework going forward. In 2024, the company remained steadfast in its approach of delivering our strategic objectives and our key development projects. Overall, our business performance was strong, notwithstanding a capital-intensive period for the company. The highlights include strong base business performance, delivering annual production of 87.1 million barrels of oil equivalent, and annual revenue of $5.4 billion and an underlying profit for the period of $1.2 billion, free cash flow from operations of $1.9 billion and a low unit production cost of $7.85 per barrel. That's excluding the late-life asset of Bayu-Undan. The net debt of $4.9 million and gearing at 29% at the 31st of December, and that's a figure that falls to 20.8% when you exclude leases. The successful start-up of the Moomba CCS Phase 1 project that we've talked about, which had an immediate and ongoing impact on the company's emissions, and the Barossa LNG project remaining on track for first gas in the third quarter and strong progress in our Pikka project in Alaska. In addition, we achieved a 28% reduction in the total recordable injury rate and a 40% reduction in the lost time injury rate, surpassing the IOGP, and that's the International Oil and Gas Operators Forum effectively, that we exceeded the top quartile benchmark and it's a 60% reduction achieved in moderate harm incidents. A loss of containment incidents decreased to the lowest rate in 5 years, and we had a 70% improvement from the prior year. These results contributed to a scorecard outcome of 90% of target out of a possible 167%. The long-term incentive award was tested following the end of the 4-year performance period. And although our share price increased by 6.5% over the period, the relative TSR measures against both the ASX 100 Index and the Global 1200 Index, which accounts for half the LTI, were not achieved. So overall, the vesting outcome was 48% based on performance in relation to the free cash flow breakeven and return on average capital employed on those measures. So I'm pleased to take questions you may have in relation to the 2024 annual remuneration report. And if you have any questions that relate to the MD's grant of share acquisition rights, please hold those and you can raise them when we get to Item 5. James, do we have any questions from shareholders registered for this item?

Chair, the first question comes from Thomas Vita from ACCR.

Good afternoon. Thomas Vita from ACCR. My question is about the growth incentive, which was awarded to the Chief Executive -- sorry, was aligned for the Chief Executive, but has continued to be a cause for concern among investors since 2021. When the incentive was granted, the Board stated it would review performance annually and disclose a detailed description of achievements each year in the remuneration report. However, this has not happened to a satisfactory level over multiple years. In this year's annual report, for example, it amounts to 9 bullet points over 5 years, and for 2024 itself, only a single bullet point. This seems a very low level of disclosure for such a large incentive. This lack of forward disclosure of detailed and specific targets doesn't allow shareholders to independently assess the progress against these measures, and the growth incentive concludes at the end of this year. So I just have, if I may, 3 questions in regards to this. Firstly, could you disclose how much of the incentive is already locked in? And what are the specific criteria by which the remainder of the incentive will be assessed looking ahead? Secondly, how will the remuneration structure change to shift from growth and better reflect the company's commitment to shareholder returns and capital discipline? And thirdly, given Mr. Gallagher has indicated this morning that he is not going anywhere anytime soon, the Board will presumably be proposing a new remuneration arrangement. How will the Board ensure that the remuneration for the CEO after the incentive ends will not repeat these regrettable failings?

Thank you. So look, we consult extensively with shareholders, and we have over the last period -- over the year and more intensively in the lead up to the AGM. I think what I would say is that we actually haven't had too many kind of questions about the scoring and the disclosures around the long-term incentive. That thing was put in place and more than 75% of shareholders voted in favor of the growth incentive project. I'd remind you of that as well. So we had a significant majority of shareholders in favor of the scheme. The scheme was put in place 4 years ago at a time when Santos was entering a period of very intense capital investment with a track record of actually not delivering projects previously all that well. So the objective of this thing was to incentivize the CEO to focus on the delivery of these critical projects, but also to sort of shepherd these first critical steps in the energy transition in the company. And part of that also was to make it mainstream, to bring the whole energy transition now, emissions reduction, et cetera, into the kind of core business rather than something that sits at the side. And of course, we wanted to retain the right CEO through that period of time. And I mean, Kevin was the perfect person for the job. And when I talked this morning about a project like Barossa being on time, on schedule despite all the things that have gone on, I think it's truly remarkable. And the legacy is we've got a strong project management capability now in the company. We've mainstreamed all the energy transition activities, et cetera. So it's fantastic, and we've still got our CEO. In terms of the scores, the actual earned amount is actually quoted in our report at 65%, and it's in the annual report. And in terms of disclosing what's at risk, there's still 35% clearly at risk. And our practice has not been to talk about what's out there, because some of those things are actually commercially sensitive, and that's why we only talk about them retrospectively. That was disclosed fully to shareholders at the time that the scheme was put in place when shareholders approved it. When the scheme finishes, given that this has achieved its objective, the Board is inclined that we will just go back to our normal scheme of base short-term incentive and long-term incentive. So we're not looking to replace it with anything special. It served its purpose very effectively, and we're very pleased with the outcome of it. But going forward, we don't see the need for it from here on in. So we're going through an exercise at the moment under Mike's leadership to benchmark, as we always do every year, the appropriate level of salary. We're not looking to replace that scheme with anything particularly. We are interested in making sure that our CEO, though, is remunerated competitively with the market, and that's our normal practice. Thank you.

Would you mind just commenting a little bit more on how the remuneration structure overall might change in regards to the company's stated shift towards increasing shareholder returns?

Well, I think one of the things that we'll explore is -- and you know at the moment, for example, in the long-term incentive scheme, we use a breakeven free cash flow number, which is really an operational one, and we exclude capital, for example. So one of the things that the Board will consider is, should we be looking perhaps for more alignment by looking at an all-in free cash flow measure. We certainly don't want to abandon the free cash flow measure, because it's crucial, it's central to the whole organization. It's the thing that we test all our investments about, we test our portfolio on, we set our budgets around. So it's not something that we would kind of drop as a measure. But whether there's a tweak to be made to that measure going forward is something that we'd look about that could align potentially more with the framework for capital management. So it's a discussion that the Board will have. We haven't had any discussions on this yet, but they're the sort of things we'll do. Year-on-year, we've often looked at moving the bar down on that scheme. And you'll see that 2 or 3 times in the last 5 years, we've actually moved the hurdle rate down as we've been able to upgrade the portfolio. As Pikka and as Barossa come online, the portfolio will improve even more. So potentially, the answer might be that we bring the benchmark -- we bring the threshold down even lower. There are many options to consider, but the Board hasn't had those conversations yet. We will over the course of the next year, and we'll bring that then. Thank you. James?

Chair, there are no further questions on this side item.

Thank you. So on the screen behind me, you'll see the displayed proxy voting outcome for this item of business. And I'll now move to Item 4, the advisory vote on the climate transition approach. Now this item asks shareholders to support Santos' climate transition approach as outlined in our 2024 annual report and our 2024 Climate Transition Action Plan. The vote on this resolution is advisory only and does not bind the Directors of the company. A detailed explanation of this item is set out in the Notice of Meeting. However, I would like to highlight the significant progress we've made on the delivery of our CTAP and on our climate disclosures. Our approach to climate has been shaped by investor engagement. The Santos Board and management have held 222 meetings with investors since 2022, including 151 meetings last year. We've engaged with our investors, and we've responded with improvements to our climate transition approach, including increased disclosure and policy commitments. And look, we thank you for this positive and productive engagement. We're confident that our climate transition approach will enable us to generate shareholder value by supplying the energy needs of today while seeking to develop the low-carbon fuels of tomorrow as customer demand and markets evolve. Your directors recognize our responsibility to set the company's strategy. However, we're asking for your endorsement of our climate transition approach. We've invested real dollars in real projects that are now leading to real emissions reduction. Since 2019, we've achieved a 26% reduction in our equity Scope 1 and 2 emissions, representing 84% progress towards our 2030 emissions reduction target of 30% in equity Scope 1 and 2 emissions. As I outlined in my opening address, in '24, we achieved that significant milestone in our CTAP with the commencement and start-up of Phase 1 of our Moomba CCS project. Our approach has been shaped through engagement with our investors, and this engagement has led to further progress, including significant work undertaken in 2024 on our physical risk assessment and the development of our carbon storage growth target that I referenced earlier. Voting in favor of this resolution will show your support for our climate approach and CTAP. Santos will continue to engage with investors as we implement our CTAP and as our technology, policy and market landscape evolves over time. James, do we have any questions from shareholders on this item?

Chair, the first question comes from Claire [indiscernible].

Good afternoon. [ Exxon ] has recently abandoned plans to repurpose infrastructure for capture and storage in the Bass Strait due to technical feasibility and economic reasons. New analysis from the North Sea also finds opportunities to repurpose infrastructure for CCS to be extremely limited. Do you still expect it's viable for the Bayu-Undan pipeline to be repurposed for a carbon capture operation and for this to result in delayed decommissioning?

Yes, we do. We expect the line to be suitable for carbon transport. And we've actually done a lot of work on that, and we've done a lot of inspection work on that. The pipeline is in great condition, and it is entirely suitable for the application that we're talking about. Thank you. Next question?

Chair, the next question comes from Michael Davey from the ASA.

Well, I stand up again Chairman because you answered it previously. I was asking about CCS. It's all been answered. Thank you very much.

Thank you, Mike. James?

Chair, the next question comes from [ Karrie Lynn ].

Thank you, Chair. My question is also about CCS. Yes. So earlier, you referenced a Wood Mackenzie CCS study. However, you failed to mention that the study puts a cost at USD 177 per tonne for the capture cost, transport cost and injection costs for carbon from Japan and South Korea to Australia. And the earlier reference to Moomba's cost of $28 per tonne is only the injection part of the equation. So based on Wood Mackenzie's estimates, it would cost Santos' customers in Japan and South Korea an estimated USD 23 billion or AUD 37 billion to capture, return and store the carbon from Santos share of the Barossa gas project in Australia. My question is, realistically, do you think any customers will be willing to pay these high costs?

The answer to that is yes. And I can refer directly to the customers that we have memorandum of understanding with at the moment in the Cooper Basin Phase 2 project and with the customers that we've been talking to on the Bayu-Undan project. We have Australian customers talking to us, but we also have Korean and Japanese customers talking to us. And they are very serious. They don't have opportunities that we have to actually dispose of CO2. And so they're looking at other options. Their alternative is something like hydrogen. Look at the cost of hydrogen. No one -- transport has not even been established yet for hydrogen. And when you start to think of the replacement of infrastructure, et cetera, that's required in places like Japan and Korea to be able to handle hydrogen, it becomes quite impractical, because the life cycle cost of that are so expensive. So yes, CCS may be more expensive than sending it to the atmosphere and substantially more expensive, but it's nowhere near the cost of some of the energy alternatives, which is why they're so engaged with us at the moment. Thank you. James, next question?

Chair, the next question comes from Martin Mansfield.

Good afternoon. I'm speaking on behalf of my wife, who is unfortunately unwell, but whose family members are long-term Santos shareholders. There are aspects of the Climate Transition Action Plan that I would support. However, overall, it is grossly inadequate if Santos is to significantly reduce its contribution to climate change. Above all, the plan says little about Santos' intention to expand its production, especially of gas. You can't be transitioning away from fossil fuels if you're planning to increase production. The company, and that means not just the Board, but we, as shareholders, have to make a moral decision. Are we going to act now to significantly reduce our contribution to climate change? Are we going to prioritize the health and well-being of our kids and grandkids and all future generations as well as the survival of other species on this planet? If the answer to these questions is yes, as it should be, then we, as Santos, have to stop expanding our production of fossil fuels. In November 2024, Santos announced that beginning in the second half of 2026, it would be prioritizing shareholder returns rather than growth for growth's sake. And the company says that delivering superior shareholder returns is the aim at the core of its climate transition approach. However, as Mr. Gallagher mentioned earlier, in January this year, Santos signed a Memorandum of Understanding of the Tamboran Resources in relation to fracking in the Northern Territory, especially in the Beetaloo Basin. Now I think this is a real problem. Firstly, because the production and burning of gas from the Northern Territory will produce enormous quantities of greenhouse gases, which will make a significant contribution to climate change. But secondly, I believe it will have a substantial negative impact on shareholder returns. I believe that Santos is grossly overestimating the level and the time span of the demand for fossil fuels. There is evidence that there is a gas supply glut coming in the next few years, which will push down prices. This won't be good for shareholder returns. And gas production in the Beetaloo Basin is particularly problematic. Beetaloo is remote and will require new pipelines, making production there very expensive. Especially, if world gas prices go down, this will also negatively impact shareholder returns. So it seems that contrary to its announcement last November, Santos is still focusing on growth for growth's sake rather than on shareholder returns. So I believe that the Climate Transition Action Plan should explicitly rule out participating directly or indirectly in increasing the production of fossil fuels, especially gas, and should state that the Board will focus on alternative sources of revenue, which Santos has already commenced with projects such as carbon capture and storage. By doing this...

I ask that you get to your question soon, please?

Yes, very soon. By doing this, the company and the Board will not only reduce our contribution to climate change, thereby helping to protect the health and well-being of our kids and grandkids and future generations, but will also strengthen shareholder returns. So my question is, will the Board commit to amending the Climate Transition Action Plan to explicitly rule out increasing production of fossil fuels and to focus on alternative sources of revenue?

Thank you for your question. I think the answer to that is a fundamental one. Our belief is that the objective of the planet is to reduce CO2 emissions and reach net zero by 2050. Whether that's achieved by abated hydrocarbons or renewables or whatever, quite honestly, I'm agnostic, the objective is to decarbonize and remove CO2 from the atmosphere. That's our objective as a company, and I totally support that. And we have the capability and the aspiration in this company to do that. So we think using the skills that we have in the organization and taking the opportunities we have around things like CCS, where we can take those first steps to decarbonizing our products is a great way to go. The world is going to need all solutions. And if we start to take a really narrow view around it, the world won't get there. It needs every piece of technology it can get to make it work. And in particular, things like CCS are really exciting, because they actually offer the opportunity for large-scale reduction in emissions. So that's where I come from, and I'm pretty certain that's where the rest of the Board are. This is a great opportunity for our business, but it's actually a great opportunity to make a difference as well. Kevin, I don't know if you want to add anything to that? Do you want to talk about Beetaloo?

There's not a lot I can add to that, Mr. Chairman, other than to say that, as I said in my speech earlier on, the demand for gas, we're talking specifically about gas here, is growing. It's not diminishing. What history shows us is if Australia stops producing gas, they either produce it from somewhere else or they burn more coal in Asia. And we saw through 2022, '23, even this year, I will predict there will be another peak year for coal. In fact, we haven't seen peak coal yet. The biggest single impact we can make in the short term across Asia to reduce carbon emissions is to replace coal with gas, because for power generation specifically, that's around 40% to 50% less emissions for the same power supply. So I think gas has got a huge part to play in the solution. Simply thinking a world exists without fossil fuels, it doesn't exist. And so I think what Santos is doing, we're spending real dollars on real projects, and we're seeing real emissions reduction. And I think that is a responsible and an effective way to reduce emissions going forward. And for all the other folks out there that talk about doing this, that and the next thing to reduce emissions, I can't think of one project in Australia in the last 3 years that has delivered more emissions reduction than the Moomba CCS project. And I am very passionate and very ambitious about building off the back of that to build initially Phase 2, where we start taking other people's emissions, and we can store that safely and reliably in the same reservoirs that came out of over the last 60 years, and then eventually utilizing that infrastructure position to start to make what I would call low carbon fuels in the future, alternative fuels.

Thanks, Kevin. Okay. James, I believe we have one more question remaining?

Chair, this is the last question, and it comes from Mark [indiscernible].

Thank you. It's a fluke that this is the last question, because my question has to do with looking at what may be the elephant in the room, which is that emissions keep climbing and climbing and climbing and climbing. Global temperatures keep climbing and climbing and climbing. You talked about your climate transition plan as being developed by extensive conversations with your shareholders, not with bodies of scientists, not with ethical people, not with teachers who deal with the anxiety that is so prevalent among children now. It was mentioned in an earlier question that the International Energy Agency asserted 4 years ago that the development of new oil and gas fields must stop within a year if the world is to stay within safe limits of global heating and meet the goal of net zero emissions by 2050. Now on May 8, the Guardian Weekly reported that 77% of scientists at the United Nations Intergovernmental Panel on Climate Commission on Climate Change expect a rise of at least 2.5% before 2100. If you were dealing drugs, reduction in output wouldn't be the measure of interest. It would be the health of the community. I think you are dealing drugs, and you're making a great deal of money from it. My question is, can the Board of Santos assure me that my investment will not contribute to the suffering and decline in living conditions for my grandchildren and future generations?

I think the way I'll answer that question to you would be, if we achieve our objectives from the CTAP, we will be net zero by 2050. That's the objective of the planet. We're going to do our bit. If everyone else does their bit, the planet will get there. But we're committed to our targets, and we're working them very hard, and we've really set ourselves up on a very strong pathway over the last several years. And we intend to continue that.

I would -- one more piece here. I would ask you to relate everything you do to the current global temperature and its direction of change and to the current global emissions and its direction of change explicitly. It's hardly been mentioned this morning, except for the last two or three questions. And it's everything that this corporation sits in contextually.

If you really want to look at that, I'd suggest you have a look at our climate change report, where we have endeavored to benchmark our milestones against the net zero scenarios from a number of, including the IEA. And you'll see there that our targets are entirely consistent with those objectives. Look, we can quote the IEA -- I can quote the IEA from March where Fatih Birol stood up and said, we need more developments in oil and gas. So I'm past that. Let's get on with the job of reducing emissions. Thank you. All right. If there are no more questions, then on the screen behind me, you'll see displayed the proxy voting outcome for this item.

So I'll now move on to the next item of business, Item 5, which relates to the grant of share acquisition rights to Mr. Kevin Gallagher. This item asks shareholders to approve the grant of share acquisition rights to the Managing Director and Chief Executive Officer, Mr. Kevin Gallagher. A detailed explanation of the item is set out in the Notice of Meeting. The Board is confident that the targets for the CEO's share acquisition rights are aligned with shareholder interests. I'll now take questions on this item. James, do we have any questions?

Chair, there are no questions on this item.

Thank you. So on the screen behind me, you will see displayed the proxy voting outcome for this item.

[indiscernible].

Thank you. So ladies and gentlemen, that completes the formal business of the 2025 Annual General Meeting, and I now declare the meeting closed subject to finalization of the polls. Please note, the polls will remain open for another 10 minutes and please ensure you lodge your vote within that time. If you need any assistance with voting, please raise your hand and a Computershare representative will come to you. Thank you for your time and for your questions and continued engagement and support. The Board and management team look forward to catching up with you in the foyer through the doors at the back of the room over light refreshments. Thank you, everyone.