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Summary

Acquisition of Interest in Hides Gas Field

Acquisition of Interest in Hides Gas Field

Santos Ltd announced today that two of its wholly owned Papua New Guinea (PNG) subsidiary companies have acquired from a subsidiary of Oil Search Limited, subject to PNG Government approvals, a 31% interest in PDL 1 in PNG. PDL 1 contains the majority of the Hides Gas Field which extends into PPL 138. The ultimate intent is for the interest acquired to translate into an equivalent 25% interest in Petroleum Development Licences granted over the entire Hides Gas Field.

The Hides Gas Field is a world class resource which has been estimated to contain proven and probable reserves in excess of 5 tcf and the purchase of this interest reaffirms the Santos Groups commitment to PNG where the Group has been active in oil and gas exploration for over ten years. Santos Group companies have made previous discoveries in PNG (Elevala gas field) and acquired the PNG petroleum operations of MIM Holdings Ltd including an interest in the SE Gobe oil field. This acquisition complements these previous investments in PNG. Reserves from the Hides Gas Field are planned to be incorporated into the proposed PNG to Queensland gas project. Hides Gas Field gas reserves are in excess of the amount required for the project to proceed and there is significant scope for Hides to supply other value adding gas projects in PNG in the longer term.

The acquisition involves a major investment. The PNG to Queensland gas project, if it proceeds, will help achieve the objective of obtaining a return on this major investment. This project is of significant importance to both PNG and Queensland and the Santos Group is committed to, and looks forward to, working closely and constructively with governments, joint venture participants in Hides, other project participants and customers to progress this project and hopefully bring it to commercial reality.