Santos Outlines 2003 Exploration Program

Santos has set its 2003 exploration budget at $147 million, an increase of 10 percent from last year. The program includes 26 exploration wells, with three to be drilled as part of a high-risk, deepwater oil play in the Otway Basin in during the second half of this year.

Last year Santos found more oil and gas than it produced for the first time in five years, adding 67 million barrels of oil equivalent (BOE) to proven reserves with discoveries in Western Australia, the US, Papua New Guinea and Indonesia. "Our reserve replacement is the first indication that we are developing the growth profile the company has needed," chief executive John Ellice-Flint said, assuring analysts that "the basic building blocks are in place". However, the company expects that production will slow to 2 - 3 percent this year and warned that growth will not resume until new fields, such as the Mutineer-Exeter oil discoveries in WA, kick in during 2005. "It will be a significant challenge for the company to match its 2002 production performance over the next two years, with 2003 and 2004 production, prior to acquisitions, likely to be around the levels achieved in 2000 and 2001," Mr. Ellice-Flint said.