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Summary

Santos today announced that its total proved and probable (2P) hydrocarbon reserves were 1,364 million barrels of oil equivalent (mmboe) at the end of 2011.

Santos today announced that its total proved and probable (2P) hydrocarbon reserves were 1,364 million barrels of oil equivalent (mmboe) at the end of 2011.

Successful appraisal and commercialisation activity, and the sanctioning of the Fletcher Finucane project, added 82 mmboe of 2P reserves in 2011. The reserve additions represent an organic 2P reserves replacement ratio (RRR) of 173%, before net acquisitions and divestments.

The reserve additions were driven by strong growth in Cooper Basin gas reserves combined with increases in coal seam gas (CSG) reserves dedicated to the GLNG project.

Net acquisitions and divestments during 2011 reduced 2P reserves by 116 mmboe. The key movements in 2P reserves from acquisitions and divestments were:

  • 82 mmboe net addition from the Eastern Star Gas (ESG) transactions for a net acquisition cost of $456 million;
  • 8 mmboe net addition from the acquisition of the remaining 35% interest in the Mereenie field and the divestment of Palm Valley;
  • 108 mmboe reduction from the sale of a 15% interest in GLNG to Total and KOGAS for aggregate proceeds of $665 million, and
  • 98 mmboe reduction as a result of the completion of the transfer of some of the GLNG upstream permits upon the receipt of third party consents in 2011 in connection with the previously announced sales of a combined 70% interest in GLNG to PETRONAS, Total and KOGAS (as identified in the 2010 Annual Report and the 2011 Third Quarter Activities Report). The adjustment does not affect gross GLNG project reserves or resources.

After deducting 2011 production of 47 mmboe, Santos’ year-end 2P reserves were 1,364 mmboe, 81 mmboe lower than 2010. The organic 2P RRR is 510% on a three-year rolling-average basis.

On a proved (1P) basis, year-end reserves were 649 mmboe, 3 mmboe higher than 2010. This represents an organic 1P RRR of 262% on a three-year rolling-average basis.

STRONG GROWTH IN COOPER BASIN GAS RESERVES

Successful initial results from the Cooper Basin gas infill drilling program, combined with improved base performance, resulted in the booking of 498 petajoules (PJ) gross of 2P reserves in 2011. After allowing for 2011 production, Santos’ share of Cooper Basin 2P gas reserves has increased by 30% to over 1,100 PJ.