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Santos provides the attached Media Release issued yesterday by Apache Energy Limited (the Operator of the East Spar, John Brookes and Harriet Joint Ventures) in relation to the Varanus Island incident.

The incident occurred on 3 June and has resulted in a total cessation of production from both the East Spar Joint Venture (processing and exporting gas from the John Brookes field) and the Harriet Joint Venture (processing and exporting gas from various Harriet fields). The processing and export facilities for both of these Joint Ventures are located on Varanus Island. Santos has a 45% interest in the John Brookes gas field and the East Spar Joint Venture gas processing facilities and no interest in the Harriet Joint Venture.

The Operator has advised that the resumption of production from Varanus Island is planned to commence with gas from the John Brookes field. The Operator’s recent advice is that the East Spar Joint Venture (processing John Brookes field gas) will achieve partial processing and export capacity of approximately 200 TJ/d gross (Santos share 45%) in mid August.

Assuming the Operator’s schedule to complete repairs and commence gas processing is achieved, the net production loss to Santos in 2008 is estimated at 1.2 mmboe.

Santos will continue to work with the Operator to resume production in a safe and environmentally responsible manner as soon as possible.