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Record earnings of $219 million, up 24%.

Earnings per share up 24% to a record 36 cents before abnormals.

Final dividend up 2 cents to 15 cents per share, making a total 1999 dividend of 27 cents per share, fully franked

Operating cash flow up 16% to a record $530m (87 cents per share), $64 million above previous peak in 1990.

Gearing (net debt to equity) down to 63%.

Santos today announced a record after-tax profit for the 1999 full year of $219.2 million before abnormals, a 24.3% increase on the 1998 result.

These results reflect the record level of production (up by 7.9% from 1998) and higher oil prices in the second half of the year.

The Company recorded an abnormal tax gain of $89.9 million, which resulted in a profit after tax and abnormals of $309.1 million.

Operating cash flow increased by 15.8% to a record $529.9 million.

The net debt to equity ratio fell from 66.0% to 63.3%, notwithstanding spending of $436 million on exploration, development and acquisitions.

Earnings per share before abnormals were 36.2 cents compared with 29.1 cents in 1998. Net operating cash flow per share was 87.4 cents compared with 75.6 cents in 1998.

In view of the strong profit result in 1999, the good results so far in 2000 and the outlook for the year as a whole, Directors have declared a final ordinary dividend of 15 cents per share, fully franked. The final dividend brings Santos total 1999 dividend to 27 cents per share, two cents higher than the 1998 total dividend of 25 cents per share. The final dividend will be paid on 28 April 2000 to shareholders registered in the books of the Company at the close of business on 3 April 2000.

Milestones achieved during the year include:

The acquisitions of interests in gas fields in Papua New Guinea and onshore and offshore Victoria, continuing the strategy of diversifying the Companys interests;

The commitment to the Bayu-Undan liquids and Legendre oil development projects;

The commencement of Santos first production in Victoria; and

The commencement of new gas contracts in Queensland and Western Australia.

Reserves of 18 million boe were discovered in 1999 and a further 18 million boe were added to reserves as a result of a further review of 1998 discoveries. The average finding cost for 1999 was $2.17 per boe ($1.65 per boe five year average). Total proved and probable reserves fell from 966 million boe to 941 million boe reflecting record production and some field revisions. The exploration success rate during the year was 41%.

Commenting on the results the Managing Director of Santos, Mr Ross Adler, said:

1999 was a good year for Santos and Directors are particularly pleased to be able to pass on the benefits to shareholders through an increase of two cents in the final dividend.

While the record profits reflect improved oil prices in the second half of the year, they are also due to our own efforts in further increasing production. Over the last five years production has increased by one third.

We also achieved record operating cash flow and successfully reduced gearing.

While 1999 was good, we expect 2000 to be significantly better than 1999 and performance in the first two months supports this view. Following successful drilling, oil production has increased considerably from both the Stag and Elang oil fields and the recently discovered Moomba 104 oil pool is expected to go into production this month.

Gas production is also expected to increase further in 2000.

Total production for 2000 is expected to exceed 51.0 million boe prior to the benefit of any acquisitions completed during 2000.

We also plan to increase spending on exploration this year, by 28%, with a total program of 54 wells.