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Summary

Major new Otway Basin gas contract for Santos

Santos Limited, operator of the Vic/P 44 permit in the Otway Basin, announces that it has successfully concluded a new long-term gas contract with TXU Australia to supply gas from the Casino gas field.

The contract is conditional on the results of the next Casino appraisal well, which is due to commence drilling next month. If the Casino 3 well is successful, gas supply will commence in 2006 and extend through to 2017.

TXU has agreed to purchase up to 293 petajoules (PJ) of gas from interest holders in the block, with an option to purchase, or an obligation to process, up to an additional 200 PJ, resulting in a possible gross contract quantity of up to 493 PJ.

‘This is a significant gas commercialisation achievement for Santos, with an innovative contract catering for the monetisation of future discoveries,’ said Santos Managing Director, Mr. John Ellice-Flint.

The Casino gas field is located offshore Western Victoria, approximately 40 kilometres from Port Campbell.

The interest-holders in VIC/P44 are:

Santos 50%
Australian Worldwide Exploration 25%
Mitsui 25%