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Press release from Santos Limited
Record $1.5 Billion Santos Revenue

January 23, 2005

ADELAIDE, Australia, Jan. 23 /PRNewswire-FirstCall/ -- Santos Limited today announced record total sales revenue of $1,500 million for the 12 months to 31 December 2004.

The record revenue reflected higher average prices across most products and was achieved despite lower production for much of the year that was largely related to the incident at Moomba on 1 January 2004.

Fourth quarter revenue of $490.1 million was also a record for any quarter in the Company's history, surpassing the previous record of $423.0 million achieved in the second quarter of 2001.

Full year production of 47.1 million barrels of oil equivalent (mmboe) was ahead of previous market guidance.

In its Activities Report for the December 2004 quarter, Santos today announced:

December 2004 quarter sales revenue was up 35.2% to $490.1 million compared with $362.5 million in the previous corresponding quarter, on a 5.2% increase in sales volumes from 13.6 mmboe in the December quarter 2003 to 14.3 mmboe in the last quarter in 2004.

Total full year sales revenue rose 2.5% to a record $1,500.9 million from $1,465.0 million in the previous 12 months, despite a 9.9% decrease in full year sales volume from 55.4 mmboe in 2003 to 49.9 mmboe in 2004.

The average realised crude oil price for the latest December quarter increased by 36.9% to A$56.77 per barrel compared with A$41.47 per barrel in the December 2003 quarter and was 1.0% lower than the A$57.36 achieved in the September 2004 quarter.

Annual gas and ethane sales revenue was down by 5.6% to $680.1 million compared with the previous year's record $720.8 million. This decrease is largely a result of lower gas and ethane production and sales, due to the 1 January 2004 incident at Moomba and excludes insurance recoveries. Liability for losses was accepted by insurers during the quarter and Santos and the insurers are now proceeding to finalise the quantum of the claim.

Total full year production of 47.1 mmboe exceeded previous guidance to the market by the Company of 45-46 mmboe and compared with 54.2 mmboe produced in 2003. The total of 47.1 mmboe includes the effect of the 1 January 2004 incident at Moomba together with the effect of previously advised declines at the East Spar and Stag fields. The last December quarter production of 12.9 mmboe was steady compared with the December 2003 quarter.

Santos Managing Director, Mr. John Ellice-Flint said: "The record full year revenue was a pleasing result given the difficult start to the year.

"The above forecast annual production and the increased revenue have coincided with the promising Jeruk discovery in Indonesia which flowed during October at almost 7,500 barrels per day restricted by surface facilities."

Also during the December quarter, Santos achieved significant progress on its current new growth projects, including:

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Bayu-Undan (Australia-East Timor Joint Petroleum Development Area: Santos interest 10.6%). Production reached design rate for a full quarter and the pipeline from the Bayu-Undan field to the LNG plant at Wickham Point in Darwin is nearing completion.

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Mutineer-Exeter oil field development (Carnarvon Basin, offshore Western Australia: Santos 33.4% and operator). Four development wells were completed and flow tested in readiness for connection to the Floating Production Storage and Offtake vessel (FPSO) during the first half of 2005. A further update on the status of the Mutineer-Exeter project will be released in February.

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Casino gas field development (offshore Otway Basin, Victoria: Santos 50% and operator). An expanded Gas Sales Agreement was signed leading to the formal go-ahead of the project. Environmental approval was also received and the subsea well heads were completed to be ready for installation during the first half of 2005.

Progress achieved with these key projects is reflected by the substantial level of capital expenditure of $929.5 million for the full year 2004.

Santos Limited is a major Australian oil and gas exploration and production company with interests in all Australian hydrocarbon provinces. The Santos Group also operates and has interests in the USA, Indonesia, PNG and the North Africa.

The Timor-Leste Institute for Development Monitoring and Analysis (Lao Hamutuk)
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