Strong Opening Quarter for Santos

Santos Limited reported higher production, sales volumes and revenue for the opening quarter of 2005, reflecting improved results across most areas and recovery from the Moomba incident which occurred on January 1, 2004.

Total production for the three months ended March 31, 2005 was 12.5 million barrels of oil equivalent (mmboe) compared with 9.7 mmboe in the previous corresponding period.

Sales volumes were also up from 10.0 mmboe to 13.6 mmboe while total sales revenue increased to $465.9 million from $256.4 million in the first quarter of 2004.

"These March quarter results are very pleasing, reflecting strong production across most areas and the benefits of increased interests acquired last year and early this year in Indonesia, the Cooper Basin and offshore Victoria," Santos' Managing Director Mr John Ellice-Flint, said today.

"The good performance also reflects the recovery from the Moomba plant incident which occurred during the comparable quarter last year. The first payment from the insurance was received during April 2005, with further payments anticipated to be received by year-end.

"The Company continued to grow production with the start up of the Mutineer-Exeter fields in late March, which had minimal impact during the first quarter but will make a major contribution to the remainder of the year, and commencement of production from the Minerva field in the offshore Otway," he said.

During mid March, the last remaining production well on the East Spar field ceased production. The likelihood of this occurring had been advised last year and the actual timing of the cessation of production is close to that previously indicated.

The John Brookes field is due on stream in August 2005 and will meet existing contractual requirements for East Spar gas supplies, together with new contracts previously announced. In the interim, arrangements are in place to purchase gas from third parties to meet these requirements.

Shortly after the end of the March quarter, significant progress was announced on further growth projects, including the award of a production licence and completion of the onshore pipeline installation at the Casino gas field in the Otway Basin, and the development of the Oyong oil and gas field offshore East Java.

During the quarter, Santos also announced an agreement with OMV Petroleum Pty Ltd to acquire the Cooper Basin and Gippsland assets of Basin Oil Pty Ltd effective January 1, 2005.

Exploration activity during the first quarter was also pleasing with discoveries at Hurricane 1 offshore Western Australia and Hiu Aman 1 in deep water offshore Kalimantan. Both of these discoveries are expected to be appraised during 2005.


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