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Drilling report for Galloway-1

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Kathryn Mitchell Andrew Seaton
+61 8 8218 5260 / +61 (0) 407 979 982 +61 8 8218 5157 / +61 (0) 410 431 004

The Galloway-1 exploration well in the Gippsland Basin permit VIC P/39(V) has been drilled to a total depth of 2,315 metres.

The Latrobe Group was intersected, however logging indicates that the primary and secondary objectives were water bearing and that hydrocarbons are not present.

The well will now be plugged and abandoned and the Ensign 32 drilling rig will move to the PEP 160 exploration well, Glenaire-1, within the Otway Basin.

The participants in VIC P/39(V) are:

Santos Offshore Pty Ltd (operator) 37.5%
Nexus Energy (Aust) NL 37.5%
Tap (Shelfal) Pty Ltd 25.0%

Santos stock symbols: STO (Australian Stock Exchange), STOSY (NASDAQ ADR), Ref #82-34 (Securities Exchange Commission