The Chairman and the Board of Directors Santos Ltd Dear Chairman...

The Chairman and the Board of Directors
Santos Ltd

Dear Chairman and Board,
I wish to object in the strongest possible terms to acceptance of the Harbour Energy bid.
I am a shareholder in Santos Limited. My wife and I purchased shares through our Self Managed Superannuation Fund some time ago, when the oil price and Santos’s share price were higher than they are now.
We are long-term investors. We took up our rights when the company issued shares at around three dollars. We have been loyal and have continued to believe in the long term strategy of Santos.
We were just beginning to feel that our patience is being rewarded.
Santos’s assets are starting to hit their straps, particularly PNG, Darwin, WA  and Gladstone, and the Cooper Basin continues to surprise. These are assets which have decades of productive life in front of them. Routine production of these assets as well as Santos’s other investments, together with the improvement of the price of oil, resulted in the best quarterly report that Santos has produced.

• A breakeven point of $36 per barrel
• free cash flow of $246 million
• solid production from Moomba, PNG, and Gladstone notwithstanding outages
• reduced net debt
• significant growth opportunities

These are the outcomes, which our investment targeted, and which are now just coming to fruition.
Your current shareholders have done all the hard work. Now Harbour Energy proposes to short change your shareholders and to reap the benefits of our foundations; benefits which will flow in the years ahead.
Your two major shareholders know that this offer is undervalued. They are electing to remain shareholders in Santos, an opportunity not being offered to all shareholders.
This unequal treatment of shareholders is particularly troubling. The offer should be rejected on this basis. If your two largest shareholders can choose to remain shareholders in the new venture, your smaller loyal shareholders should have the same opportunity.
If you consider that some shareholders may wish to accept the $7.00, then insist that Harbour Energy make an unconditional on market bid at $7.00 per share. This is the only fair way to resolve the competing interests.
Please do not accept this offer.

Thank you