Santos Increase Stake in Stag Oil Field

Santos Limited will increase its interest in the Stag oil field and acquire new exploration acreage in the Carnarvon Basin through an agreement to acquire Globex Far East Pty Ltd for US $15.8 million. Globex is a wholly owned subsidiary of the US based Marathon Oil Company. The effective date of the acquisition is July 1, 2003.

The Globex interests includes; WA-15-L containing the producing Stag oil field (12.5%), WA-246-P containing the Corvus gas discovery (15%), and WA-209-P containing the Reindeer gas discovery (19%).

Santos has been a participant in the Stag Field since its discovery by the Stag-1 exploration well in June 1993. Initial field production started in May 1998 with a peak rate of 30,000 barrels of oil per day reached in August 2000. As a result of the acquisition Santos' interest in the Stag oil field increases from 54.166% to 66.667%.

The acquisition increases Santos' share of estimated oil production from Stag in 2003 by 300,000 barrels and in 2004 by 500,000 barrels. It also increases Santos participation in Carnarvon gas opportunities through the acquisition of Corvus and increased Reindeer gas interests.

"This is a good value-adding bolt-on acquisition for Santos in assets we know well," said Santos Managing Director, Mr. John Ellice-Flint.

Interests in WA-15-L (Stag) are Apache Northwest P/L 33.333% (Operator); Santos Offshore P/L 66.667%.

Interests in WA-246-P are Apache Northwest P/L 45% (Operator); Kufpec Aust P/L 20%; Pan Pacific Petroleum 10%; Tap (Harriet) P/L 10%; Santos Offshore P/L 15%.

Interests in WA-209-P are Apache Northwest P/L 45% (Operator) and Santos Offshore P/L 55%.

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