Santos Welcomes Shareholding Cap Review

Santos welcomes today's decision by the Premier of South Australia, the Honorable Mike Rann MP, to initiate a review of the 15% shareholding restriction that has been in place since 1979.

This review is in response to a request made by Santos to the South Australian Government.

The outcome of the review is expected to be announced by the end of September 2007. A copy of the South Australian Government's news release is attached.

Commenting on the announcement, Santos' Chairman, Mr. Stephen Gerlach, said that the Board is unanimously of the view that the cap is not in the best long-term interest of Santos' shareholders, and is an impediment to Santos realizing its full growth potential.

"The Premier's review is, we believe, a positive and important step in addressing these concerns, and timely given the last review was undertaken by the Government in 2000," he said.

Santos' Managing Director, Mr. John Ellice-Flint, joined Mr. Gerlach in welcoming the Premier's announcement. "We are very pleased with the Premier's decision to initiate this review. We will be submitting to the review that the shareholding cap is no longer relevant, given the changes in the South Australian energy markets since its introduction over 28 years ago," he said.

"During that time Santos has also changed considerably, developing a diverse asset base with oil, gas and LNG production throughout Australia and internationally. We have also continued to demonstrate our strong commitment to the State through significant investments in our new corporate headquarters in Adelaide, and in the ongoing development of the Cooper Basin."

"The Board and management have an obligation to our shareholders to maximize the value of their investment," Mr. Ellice-Flint said. "The presence of the cap clearly hinders this objective."


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