Santos Revenue Up 64% to Record $2.46 Billion

Santos announced record sales revenue of $2.46 billion for the 2005 full year, up 64% on the Company's previous record of $1.5 billion achieved in 2004.

The result was driven by a 19% increase in production to 56.0 million barrels of oil equivalent (mmboe) together with continuing higher oil and gas prices.

Full year production was ahead of Santos' initial and revised 2005 targets of 54.0 mmboe and 55.0 mmboe respectively.

Fourth quarter 2005 production of 14.8 mmboe was 15% higher than the previous corresponding period in 2004, reflecting the new projects commissioned during the year, including Mutineer-Exeter and John Brookes offshore Western Australia, together with the acquisitions of Fairview in south-west Queensland and increased interests in the Otway basin in Victoria.

Sales revenue during the fourth quarter of $679 million was the second highest ever reported by Santos and was 39% ahead of the previous corresponding period in 2004, although 11% below the record third quarter of 2005 due to the timing of LPG liftings and seasonal factors which impact on gas sales.

The average realised gas price in the fourth quarter of A$3.80 and oil price of A$79.97 (US$59.85) were 12% and 41% higher respectively compared with the previous corresponding period.

Santos Managing Director, John Ellice-Flint said: "The record revenue is an outstanding result and testament to the strategy of growing the business outside of our traditional eastern Australian gas assets.

"The oil, condensate and LPG contribution from projects such as Mutineer-Exeter, offshore Western Australia, and the first phase of the Bayu-Undan project, offshore Darwin, have significantly changed the profile of the company at a time of sustained high commodity prices," he said.

"Our outlook is for further production growth in 2006 to between 60 and 61 mmboe as we bring further new projects into production, including the LNG phase of Bayu-Undan, Casino offshore Victoria, and Oyong in East Java."

    Other developments during the December quarter included:

    - Completion of the acquisition of the minority interests in Tipperary
      Corporation for US$466 million ($612 million), which delivers an
      approximate 75% operated interest in the Fairview coal seam gas field in

    - The award of the NT/P69 block in the Timor Sea to Santos (40%) and
      ConocoPhillips (60%), which contains the Lynedoch gas resource and is
      immediately adjacent to the recent Caldita gas discovery;

    - Completion of construction of onshore gas processing facilities and the
      ramp-up of production from the John Brookes field in the Carnarvon
      Basin, offshore Western Australia;

    - Significant progress on the Casino gas development offshore Victoria,
      with the laying of the pipeline in preparation for first gas ahead of
      schedule early in 2006;

    - Commissioning of the Bayu-Undan LNG plant at Wickham Point near Darwin,
      with first cargos of LNG now expected ahead of schedule by early
      February 2006; and

    - Progress on the Oyong project offshore East Java, with the completion of
      development drilling and ongoing conversion works on the Floating
      Storage and Offtake vessel (FSO) and the production barge.  Due to the
      timing of the conversion of these vessels, first oil production is now
      expected late in the first half of 2006 and the total project cost is
      forecast to increase by approximately 30% to US$130 million.

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