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2004 First Quarter Activities Report

Santos Limited today reported lower production, sales volumes and revenue for the opening quarter of 2004, principally attributable to the 1 January 2004 incident at Moomba.

Total production for the three months ended 31 March 2004 was 9.7 million barrels of oil equivalent (mmboe) compared with 13.0 mmboe in the previous corresponding period.

Sales volume was down from 13.6 mmboe to 10.0 mmboe while total sales revenue dropped to $256.4 million from the record quarterly revenue of $362.5 million in the first quarter of 2003.

The latest March quarter reflects a 2.9 mmboe negative impact of the 1 January 2004 incident at the Moomba plant in South Australia.

“These reduced March quarter results are in line with the Company’s previous guidance to the market and, as expected, are due primarily to the impact of the Moomba plant incident,” Santos’ Managing Director Mr. John Ellice-Flint, said today.

“As has been well documented, our full-year production will be down in the current calendar year, including the effects of the Moomba setback.

“Despite the depressed quarterly figures, we remain confident of building annual production to record levels over the next few years,” he said.

Since the end of the latest March quarter, full gas processing capacity has been achieved from the Moomba plant.

Further repair work remains on schedule to fully restore natural gas liquids production for the second half of July.

Mr Ellice-Flint said the Company continued to focus on developing its strong line-up of growth projects.

Significant progress on growth projects during the March 2004 quarter

  • The Bayu-Undan liquids project achieved the milestone of first lifting of condensate on 30 March.
  • The Mutineer-Exeter oil field development (Santos 33.4%) where two major milestones were achieved; delivery of sub-sea wellheads into Dampier and commencement of conversion of the MT Airway into a Floating Production and Storage Off-take in Singapore.
  • In the Casino gas field in the Otway Basin, the project proceeded to Front End Engineering and Design studies.
  • The strategic marketing alliance with BP for the marketing of Santos’ crude oil and natural gas liquids.

During the latest March quarter, Santos also announced an agreement with Sunov Petroleum to acquire Novus Petroleum’s Indonesian and Cooper Basin assets, conditional on Sunov’s current offer for Novus being successful.

Mr Ellice-Flint said Santos was working towards approval of three significant new growth projects in coming months, namely the development of the:

  • John Brookes gas field offshore WA
  • Casino gas field offshore Victoria
  • Oyong/Maleo gas fields offshore East Java.