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Summary

Indonesian success for Santos with Maleo-2

5 December 2002

Santos Limited has announced a successful gas appraisal well in Indonesia.

Its wholly owned subsidiary, Santos (Madura Offshore) Pty Ltd, as operator of the Madura Offshore Production Sharing Contract (PSC) located south east of Madura Island, East Java, has conducted a successful flow-test of the Maleo-2 gas appraisal well.

The well flowed at 855,000 cubic metres (30.2 million cubic feet) of gas per day. The result confirms the resource potential of the field as 250 to 400 billion cubic feet of gas.

The Maleo gas field, which was discovered by Santos in June this year, is located in shallow waters 140 kilometres east of the city of Surabaya in the East Java region of Indonesia.

“This is a good result, which confirms the resource potential of the block”, Santos’ Managing Director Mr John Ellice-Flint said.

“Maleo-2’s flow-rate is higher than expected, indicating excellent reservoir quality”.

“As the Maleo field is only seven kilometres from the main Pagerungan gas pipeline to Surabaya it is well placed to contribute towards the significant energy needs in East Java,”.

“It also provides another important lever to grow our petroleum business in Indonesia.”

Other Santos-operated projects in the region include the Oyong gas and oil discovery, 70 kilometres west of Maleo, and the Bentu gas project onshore Sumatra.

Santos (Madura Offshore) Pty Ltd, has now completed wire-line logging operations on Maleo-2 and has commenced a period of well testing.

Located three kilometres northwest of Maleo-1, Maleo-2 encountered a 25.8 metre gross gas column (25.8 metres net) between 581.2 metres and 607 metres in the Early Pliocene Mundu Formation limestone.

The well was cased and perforated between the interval of 583 metres and 593 metres. The final measured flow rate was 855,000 cubic metres per day (30.2 million cubic feet per day) through a 50.8 millimetre (2 inch) choke at a well head tubing pressure of 3061 kilopascals (444 pounds per square inch). The reservoir is well developed with high quality sales gas with negligible CO2 content.

Drilling of the Maleo-2 appraisal well followed the Maleo-1 gas discovery in June 2002. Santos farmed into the Madura Offshore PSC following the Oyong gas and oil discovery made in the adjoining Sampang PSC in August 2001.

All reported depths are referenced to the rotary rig table.

Participants in the Madura Offshore PSC are:

Santos (Madura Offshore) Pty Ltd 75% (Operator)

Talisman (Madura) Ltd 25%

Santos (Madura Offshore) Pty Ltd is a wholly owned subsidiary of Santos Limited, a major Australian oil and gas exploration and production company with interests in all Australian hydrocarbon provinces, Indonesia, the USA and PNG.

Talisman (Madura) Ltd is a wholly owned subsidiary of Talisman Energy Inc. one of the largest independent Canadian oil and gas producers.