Santos Announces Indonesian Farm-In

Santos Limited has announced a farm-in agreement in Indonesia that will give increased exposure to the trend that includes the recent Oyong oil and gas discoveries and Anggur prospect. The agreement confirms Santos' growing interest in Indonesia.

The agreement with Talisman (Madura) Ltd will allow Santos to farm-in to the 4,246 square kilometer Madura Offshore Production Sharing Contract (PSC) in the Madura Strait, East Java. The Madura PSC is located 63 miles east of Surabaya in shallow water.

Santos now has a 75% working interest in the PSC as well as operatorship. Santos will drill a well in the PSC in 2001 at its sole cost. Santos' Managing Director Mr. John Ellice-Flint said, "The Madura PSC farm-in leverages our recent discovery in the Sampang PSC. The Madura PSC is on-trend with the Oyong oil and gas discovery and the Anggur prospect where Anggur 3 has commenced drilling. The farm-in gives us greater exposure to this emerging hydrocarbon play."

"Santos is aiming for rapid development of discoveries and is targeting production from the Oyong field within 24 months."

"The farm-in to the Madura PSC and the recent offshore Otway farm-in are examples of Santos acquiring assets that provide a platform for growth to meet the strategic targets established at the May 2001 Annual General Meeting."

The Madura Offshore PSC permit is 21 miles from the Oyong 1 and 2 hydrocarbon discoveries that intersected a 145 meter hydrocarbon column, 110 meters of gas and 35 meters of oil. The large part of the PSC has water depths of less than 330 feet. Final testing of the Oyong 1 discovery resulted in oil flowing at over 1,100 barrels of oil a day through an 11 millimeter choke at a flowing tubing head pressure of 999 psi. Gas flowed at over 12 million cubic feet a day through a 19 millimeter choke at a flowing tubing head pressure of 1005 psi.

Santos now has an interest in and is the operator of over 6,900 square kilometers in the Sampang and Madura PSCs. Interests in the Madura Offshore PSC are: Santos (Madura Offshore) Pty Ltd as operator with 75 percent interest; Talisman (Madura) Ltd with the other 25 percent interest.