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Summary

Santos steps up Carnarvon Basin oil exploration

Santos Limited (ASX:STO, NASDAQ:STOSY) has commenced an exploration and appraisal oil drilling program in its Carnarvon Basin permits in Western Australia.

The exploration drilling program includes Bligh 1, which spudded 29 September 2002, and Immortelle 1 plus the two appraisal oil wells, Mutineer 3 and Exeter 3.

The Bligh 1 exploration well is in Santos WA-191-P permit, which is the same permit as the companys Mutineer and Exeter oil fields discovered earlier this year. Immortelle 1 will be drilled in the TP/7(1) permit south of Barrow Island.

The Norfolk/Mutineer and Exeter discoveries – on the northern perimeter of the Carnarvon Basin – provided Santos with its best offshore oil results to date as operator. The Mutineer 3 and Exeter 3 appraisal wells will be drilled back to back mid October to optimise a development plan for the Mutineer and Exeter fields.

Bligh 1, located 10 kilometres east of the Mutineer discovery is targeting an upside oil resource potential of 50 million barrels. It will be drilled by the SEDCO 703 rig in waters 156 metres deep and is expected to take 19 days.

The well will test the same reservoir (Angel Formation Sandstones) as encountered in the Mutineer/Exeter discoveries.

The second confirmed oil exploration well, Immortelle 1, is scheduled to spud in mid October. The well is also within the Carnarvon Basin but located south of Barrow Island in the TP/7(1) permit.

Immortelle 1 is regarded as a moderate risk oil target with gross upside potential of 30 million barrels of oil.

Santos’ Managing Director, Mr John Ellice-Flint, said today that the Carnarvon Basin was a focus for the companys offshore exploration program and is one of the key project areas for delivering future growth for Santos.

Combined, the two exploration wells are targeting gross potential oil reserves up to 80 million barrels.” he said.

Key growth drivers

“Accelerating our drilling program in the Carnarvon Basin is an opportunity to reduce cycle times between discovery and appraisal, especially the Mutineer/Exeter oil development,” he said.

“Bligh 1 is being drilled as part of our evaluation of prospectivity within tie-back distance of a future Mutineer/Exeter development.”

Santos has already initiated conceptual engineering work on the field in parallel with the new drilling program and ahead of the appraisal well results.

Santos has interests in five producing fields in the Carnarvon Basin.

The latest program is part of Santos’ second half exploration program which will see up to 17 wells drilled worldwide in the six months to 31 December, 2002, compared with six in the first half of the year.

Interest holders in WA-191-P are:

Santos (Operator) 33.4%
KUFPEC 33.4%
Nippon 25.0%
Woodside 8.2%

Interest holders in TP/7(1) are:

Santos (Operator) 43.71%
Apache 39.66%
Mobil 12.47%
Pan Pacific Petroleum 4.16%

FOR FURTHER INFORMATION PLEASE CONTACT:

Media enquiries:

Kathryn Mitchell
Santos Limited
(08) 8218 5260 / 0407 979 982

Investor enquiries:

Mark Kozned
Santos Limited
(08) 8218 5939 / 0407 747 908

Santos stock symbols: STO (Australian Stock Exchange), STOSY (NASDAQ ADR)