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Summary

2001 Gazettal Acreage Awards

A consortium led by Australias largest net gas producer, Santos Limited (ASX:STO, NASDAQ:STOSY), is to undertake one of the biggest petroleum exploration programs mounted in southern Australia.

The total program could see exploration expenditures of up to $185 million over the next six years, in four new blocks, extending from south of Portland in Victoria to the northwest corner of Tasmania .

Santos is Operator of all four blocks with equity interest ranging from 331/3 percent to 80 percent. The blocks, three of which are in deep water, cover a total area of 18,260 square kilometres, with prospects in water depths up to 1,500 metres.

Seismic work is planned to commence this year and three wells are planned for the second year of the program.

The Santos-led joint venture includes international oil companies, Unocal and INPEX.

Unocal is a large independent US oil company. It is highly regarded for its deep water drilling expertise. INPEX is the largest Japanese upstream oil company with international exploration experience including extensive existing Australian interests.

This is a significant opportunity for Santos . Exploration is a key plank of our growth strategy, Santos Managing Director, Mr John Ellice-Flint, said today.

These frontier blocks are high-risk but have high-impact exploration potential for both oil and gas.

While it’s early days, we like the geology, we have world-class partners and the acreage is close to existing areas in which we operate.

Strategically, this program Santos first in deep water is part of the continuing broadening of our interests. We already have interests in all of Australia’s major petroleum basins, as well as in South East Asia and the United States.

None of the permits has previously been drilled but the prospects identified in the blocks are highly encouraging.

The Federal Government announced today that the consortium has been awarded four gazettal blocks in the Otway and Sorell Basins between Tasmania and western Victoria.

Two of the blocks are south of Portland in the Otway Basin, west of the Thylacine, Minerva and Geographe discoveries and close to the expanding onshore pipeline grid servicing high demand energy markets in Melbourne and Adelaide.

The third and fourth blocks are approximately 50 kilometres northwest of Tasmania ‘s west coast in the Sorell Basin .

The interests in the blocks are as follows:

Block

Santos

Unocal

INPEX

VIC/P51

80%

0%

20%

VIC/P52

331/3%

331/3%

331/3%

T/32P

50%

50%

0%

T/33P

80%

0%

20%

For further information contact Graeme Bethune, General Manager Business Development on (08) 8218 5157 or 0419 828 617.