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Summary

1999 Second Quarter Activities Report

Second quarter highlights

The following results were achieved compared with the 1998 second quarter:

  • Production volume increased by 10.5% to 12.1 million boe
  • Sales volume increased by 19.6% to 12.8 million boe
  • Sales revenue increased by 28.0% to $231.0 million

First half highlights

First half highlights compared with 1998 are as follows:

  • Production volume increased by 14.8% to 24.1 million boe
  • Sales volume increased by 18.4% to 23.8 million boe
  • Sales revenue increased by 21.2% to $412.8 million

Comment by Mr Ross Adler, Managing Director:

The record sales volume and strong growth in sales revenue during the quarter were particularly pleasing. Demand for gas was the strongest ever experienced by Santos and we benefited from the increase in oil prices during the second quarter, although there was a 5.1% fall in the average US dollar oil price realised between the respective first halves.

Record first half production and sales volumes and sales revenue were recorded.

However, offsetting this pleasing increase in sales revenue, the companys 1999 interim results will also reflect lower Other Revenues due to the absence of asset sales and other items which contributed to the 1998 first half.

Oil production during the 1999 second quarter was 25.2% higher than in the 1998 second quarter.

The Elang/Kakatua/Kakatua North oil fields performed below expectations

following the fields initial better than expected performance. This is because of lower than predicted reservoir pressure support for Elang 1 and greater than expected water production in Kakatua North 1.

The rate of exploration success was also down during the quarter, reflecting the smaller onshore Australia program and disappointing results in the companys higher risk exploration areas offshore Australia and in Papua New Guinea and the Gulf of Mexico.