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Santos Ltd announces that an agreement has been entered into with Petrobras UK Limited for the sale of Santos Europe Ltd.

The effective date of the sale is 1 January 1998 and, subject to customary regulatory approval, settlement will take place on 30 June 1998.

The net value of the sale to the Santos Group, inclusive of working capital, will be approximately A$135 million, which represents an after tax profit of some A$7 million.

Commenting on the significance of the sale to the Santos Group, the Executive General Manager – Commercial of Santos Ltd, Mr John McArdle, said:

Although in the first instance the proceeds from the sale of Santos Europe Ltd will be applied towards debt retirement, the significance of the sale to the Santos Group is the successful attainment of the first stage of the Groups strategy to focus its Northern Hemisphere business development on the USA. In March 1998, the Santos Group successfully bid for six blocks in the Gulf of Mexico, adding to the nine blocks awarded in 1997 and to its other US exploration and production interests. First production from the Gulf of Mexico blocks awarded in 1997 is expected in 1999.