Santos Secures Long-Term Gas Contract for Casino

Santos Limited has successfully concluded a new long-term gas contract with TXU Australia to supply gas from the Casino gas field. The contract is conditional on the results of the next Casino appraisal well, which is due to be drilled by Diamond Offshore's semisub, Ocean Epoch, shortly. If the Casino 3 well is successful, gas supply will commence in 2006 and extend through to 2017.

TXU has agreed to purchase up to 293 petajoules (PJ) of gas from interest holders in the block, with an option to purchase, or an obligation to process, up to an additional 200 PJ, resulting in a possible gross contract quantity of up to 493 PJ. "This is a significant gas commercialization achievement for Santos, with an innovative contract catering for the monetization of future discoveries", said Santos Managing Director, Mr. John Ellice-Flint.

The Casino gas field is located offshore Western Victoria, approximately 40 kilometers from Port Campbell. Santos is the operator of the VIC/P44 permit in the Otway Basin.

The interest-holders in Vic/P 44 are Santos with 50%; Australian Worldwide Exploration with 25% and Mitsui with the other 25%.