Santos Ltd

Octanex says Santos's final analysis lifted Winchester-1/ST-1 net condensate-bearing gas pay from 40 m to 58 m, in Angel and Mungaroo sands, with total depth 4,019 m. Near existing infrastructure, which Octanex says offers commercialisation options. Abandonment due to finish about 21 August.

drilling result

Santos reported first-half net profit up 3% to A$271m on revenue of A$1,510m. Underlying profit fell 11% to A$251m and production fell 4% to 24.5 mmboe. Interim dividend is 15c, and funding capacity is A$4.8bn.

half year report

Q2 2013 production was 12.4 mmboe and sales revenue A$797m, a record first half. Santos cut 2013 production guidance to 52-55 mmboe from 53-57, citing Chim Sao, Sangu and Carnarvon oil. PNG LNG is near 90% complete, GLNG over 60%.

quarterly activities report

Santos announced a gas discovery at Winchester-1 (WA-323-P, Santos 75% operator), with 40 m of net gas pay between 3,614 and 3,721 m. It is Santos's fourth straight offshore WA gas discovery, after Crown, Bassett West and Bianchi; the well will be deepened.

drilling result

Santos confirmed the Bianchi-1 gas discovery in WA-49-R with 112 m of net gas pay, in a separate fault block down dip of Zola-1 (found 2011). Santos holds 24.75; Apache operates. It adds resource in the Zola area.

drilling result

Santos will earn 60% and operatorship of Drillsearch's Western Cooper Wet Gas project by funding a work program Drillsearch values at A$100-120m. Drillsearch buys 29% of Tintaburra from Santos for A$36.8m, and Santos buys its 25.8% of PEL 100 and farms into a 33% interest in ATP 549P West.

asset acquisition disposition

Santos announced a gas discovery at Bassett West-1 (WA-408-P, Santos 30%, Total operator), with 7.5 m of gas pay in Jurassic sandstones at 5,239 m total depth. It is the first result from the Browse drilling flagged earlier; the overall resource size still needs more work.

drilling result

Santos started first oil from the A$490m Fletcher Finucane project on 20 May, ahead of schedule and on budget. Gross rate is projected at 15,000 bbl/d for the first year, with reserves of about 14 million barrels. Santos holds an effective 44%. This delivers the mid-2013 start flagged earlier.

production update

Chairman Peter Coates will retire as chair at the 9 May 2013 AGM, staying on as a non-executive director, because of a full-time executive role at Glencore/Xstrata. Director Ken Borda, on the board since 2007, succeeds him.

director officer appointment

Santos spudded Winchester-1 in WA-323-P at 23:00 on 7 April 2013, targeting Triassic reservoirs to 4,803 m in about 75 m of water, roughly 80 days of drilling. Santos holds 75% and Octanex 25%, free carried.

drilling spud

Central Petroleum completes its farm-out to Santos over most of the Amadeus and Pedirka Basin areas (over 18.7 million acres), following the October 2012 deal. The EP97 portion is deferred until the Rawson Resources transaction completes.

farm in farm out completion

S&P will treat Santos's €1bn 2010 hybrid as debt rather than equity and has placed the BBB+ rating on CreditWatch negative. Santos says its financial position is unchanged, with A$5.8bn cash and undrawn debt, and capital management will be considered later in 2013 once PNG LNG generates cash in 2014.

other

Santos lifts 2P reserves to 1,406 mmboe from 1,364 mmboe a year earlier, a 180% replacement of 2012 production, including Australia's first shale gas booking from Moomba-191. Contingent resources fell about 200 mmboe to 1,965 mmboe, partly from GLNG coal seam gas reassessment.

resource reserve update

Santos reports 2012 net profit of A$519m, down 31% because 2011 included asset sale gains, while underlying profit rose 34% to A$606m. Operating cash flow was A$1,658m, funding capacity A$5.8bn, and the final dividend 15c. GLNG and PNG LNG costs are stated unchanged; Fletcher Finucane first oil is expected by mid-2013.

annual report

Annual investor seminar. New guidance: 2013 production 53-57 mmboe and capex about A$4bn (peak GLNG year, including the PNG LNG cost increase), exploration A$325m. Over A$6bn of funding capacity at 30 Sep; says no extra funding needed under reasonable scenarios. Reaffirms 80-90 mmboe by 2020.

investor presentation

Santos announces a significant gas discovery at Crown-1 (WA-274-P, Browse Basin, Santos 30% operator): 61 m net gas pay, no gas-water contact, drilling on to 5,200 m. Also agrees to take 30% of adjoining WA-408-P from Total, with wells to follow.

drilling result

Operator ExxonMobil raises PNG LNG's estimated cost from US$15.7bn to US$19bn, mainly from the stronger Australian dollar. Santos's 13.5% share rises about US$450m, with roughly US$130m extra equity. Plant capacity rises to 6.9 mtpa; project 70% complete, first LNG still 2014.

joint venture update

Central Petroleum announces Santos will fund up to A$150m, A$30m initially, to earn up to 70% of 13 Amadeus and Pedirka Basin permit areas and become operator. Central keeps at least 30% with a free carry. Subject to Central renewing permits.

farm in farm out agreement

First-half 2012 net profit fell 48% to A$262m because 2011 included A$246m of asset-sale gains; underlying profit rose 20% to A$283m on revenue of A$1,522m. Interim dividend is 15c, matching last year's. Funding capacity is A$6.8bn.

half year report

Santos raises GLNG capital cost from US$16bn to US$18.5bn to end-2015 by bringing forward US$2.5bn of upstream spending (about 300 extra wells); its 30% share is US$750m. Santos says first LNG stays 2015 and it will not raise new capital.

material agreement

Santos, with ConocoPhillips, agreed to let SK E&S earn 37.5% of Caldita and Barossa, cutting Santos's interest from 40% to 25%. SK funds the first US$260m of a three-well appraisal program from 2013, plus up to US$90m for pre-FEED and FEED, and up to US$110m on FID and first cargo.

farm in farm out agreement

Magellan's filing says the asset swap with Santos completed on 25 May, effective 1 July 2011. Santos takes Magellan's 35% of Mereenie for A$28.0m and gives up its Palm Valley (48%) and Dingo (66%) stakes. Magellan may earn up to A$17.5m in bonus payments over 20 years.

asset acquisition disposition

The GLNG partners signed a binding agreement to buy 365 PJ of gas from Origin over 10 years from 2015, at 100 TJ/day at Wallumbilla on oil-linked pricing. It adds to Santos's earlier 140 TJ/day supply to GLNG; Santos holds 30%.

contract award

2011 net profit rose 51% to A$753m, including A$408m after-tax gains from asset sales (15% of GLNG, Evans Shoal) and A$102m of impairments. Underlying profit was A$453m (up 20%), with A$7.5bn funding capacity and a 15c final dividend. Evans Shoal sale to ENI completed; Kipper first gas deferred beyond 1H 2012 for mercury removal.

annual report

Santos's 2P reserves ended 2011 at 1,364 mmboe, 81 mmboe below 2010's 1,445, after 82 mmboe of organic additions (173% replacement) were outweighed by 116 mmboe net from sales (GLNG stakes, permit transfers) and ESG. Contingent resources fell to 2.2 billion boe.

resource reserve update

First gas flowed from Wortel in Indonesia's Sampang PSC, on budget, with Oyong and Wortel combined expected at 90 TJ/day gross. Santos (45%, operator) calls it the fourth base-business start-up in eight months; the long-awaited Wortel gas is now delivered.

production update

Santos approved the A$490m Fletcher Finucane oil project, first oil in 2H 2013 at about 15,000 bopd gross, 14 million barrels 2P. Santos becomes operator with an effective 48% after buying Tap's interest for A$18m; its capex share is A$236m.

material agreement

Santos secured US$1.2bn of export-credit-agency-backed corporate debt facilities, averaging eight-year maturities, to fund the GLNG construction period. It says total funding capacity, including cash and committed facilities, exceeds A$7bn. Drawdown conditions are expected to be met by January 2012.

debt financing

First gas from Reindeer/Devil Creek flowed into the Dampier-Bunbury pipeline, with the plant initially ramping to 120 TJ/day sales. Santos (45%, Apache operator) calls it the third of four year-end start-ups, on schedule and budget.

production update

The Eastern Star Gas scheme was implemented: ESG holders receive 0.06881 Santos shares per ESG share. Santos executives replace ESG's directors, and ESG has applied for delisting, expected 21 November. Santos now owns the Gunnedah/Narrabri CSG assets.

business combination

Santos completed the Eastern Star Gas acquisition, owning and operating 80% of its CSG permits (TRUenergy takes 20%), lifting NSW reserves to 1,216 PJ 2P. It withdrew ESG's Narrabri-Wellington pipeline application and plans about A$500m of exploration, including 15 pilot wells, over the next year.

business combination

Santos agreed to sell its entire 40% operated interest in Evans Shoal (NT/P 48) for up to US$350m: US$250m cash at completion plus up to US$100m contingent on a positive FID and reserves. Buyer is unnamed; completion targeted by end-2011. This follows the terminated Magellan sale.

asset acquisition disposition

Partner Tap Oil reports an independent estimate for Zola, the WA-290-P gas discovery in which Santos holds 24.75%: 378 Bcf contingent resource and 2.3 Tcf prospective in the wider structure. Follows the Zola-1 discovery; a new 3D seismic survey is being processed, with drilling late 2012.

resource reserve update

First oil flowed from Chim Sáo in Vietnam (Santos 31.875%, Premier Oil operator), on schedule and under budget, from six wells with a plateau of about 25,000 barrels a day gross. It is the second of four 2011 start-ups, after Halyard/Spar.

production update

Carbon Minerals says it agreed with Santos to transfer a further 40% of Gunnedah Basin PELs 1 and 12 for A$15m, taking Santos to 65% and Carbon Minerals to 35%. A new work program runs to June 2013. A partner announcement, not Santos's.

farm in farm out agreement

ESG's release of the scheme booklet: the expert values the Santos scrip at A$0.79-0.89 per ESG share, below the A$0.90 headline after Santos's share price fell. Meetings are 28 October, with implementation expected 17 November. The expert found the TRUenergy share purchase neither fair nor reasonable.

business combination

Magellan says it signed an asset swap with Santos: Santos hands over its 48% of Palm Valley and 66% of Dingo for Magellan's 35% of Mereenie, plus A$25m cash to Magellan. Completes the Amadeus Basin rationalisation Santos had been discussing; Santos gets Mereenie.

asset acquisition disposition

Transfield Services says Santos picked it as preferred contractor for a Cooper and Eromanga construction and maintenance contract worth about A$100m a year. It runs five years plus three one-year extensions, subject to conditions. This is separate from and follows the A$102m Easternwell well servicing deal.

contract award

Half-year to June 2011: net profit A$504m (up 155%), underlying A$236m (up 12%), production 22.9 mmboe (down 5%). Interim dividend 15c, down from 22c a year earlier. The headline profit includes asset-sale gains, including the GLNG stake sale to Total and KOGAS.

half year report

Santos agrees to buy the 79% of Eastern Star Gas it does not own, via a scheme paying 0.06803 Santos shares per ESG share: A$0.90 a share, A$924m. It will sell 20% of ESG's permits to TRUenergy for A$284m. Completion is expected by end-October. Follows its existing 35% PEL 238 stake.

business combination

Octanex says its farmout of WA-323-P and WA-330-P to Santos is now unconditional. Santos takes 75% and operatorship, pays Octanex A$7m for past costs, and will shoot 3D seismic in Q4 2011 and drill a well within three years.

farm in farm out completion

Gas production began from Halyard-1 in the Greater East Spar area, on time and on budget. Santos holds 45%, Apache operates. It is the first of four 2011 base projects; Chim Sao, Reindeer and Wortel are on schedule for 2H. Varanus Island volumes stay near current levels for now.

production update

The sale of Santos's 40% of Evans Shoal (NT/P 48) to Magellan will not complete, as conditions were unmet by the 31 May deadline. Santos keeps the interest and operatorship, and says it retains a A$15m non-refundable deposit. Ends the A$100m sale.

asset acquisition disposition

Santos announces an oil discovery at Finucane South with an 18m net oil column, on the high side of pre-drill expectations. A joint development with the Fletcher discovery could be decided before end-2011, with first oil by end-2013. Santos operates with 33.4%.

drilling result

Tap, a 8.2% partner, reports Finucane South-1A found a new oil field with 18.5m of net oil pay in the Angel Formation, reaching 3,190m. Early evaluation suggests it could exceed the 8 million barrel pre-drill estimate. Resolves the well Santos operates (33.4%).

drilling result

March-quarter production was 11.0 mmboe, down 11% on a year earlier, after floods in the Cooper Basin and cyclones offshore WA. About 2 mmboe is deferred from 2011, so full-year guidance is cut from 48-52 to 47-50 mmboe. Other guidance is unchanged apart from DD&A per barrel.

quarterly activities report

Santos announces a gas discovery at Zola-1 (Santos 24.75%, Apache operator), with over 100m of net gas pay over a 400m interval in the Mungaroo. Logging and pressure testing confirmed it; partners will appraise and discuss development. Confirms earlier gas indications.

drilling result

Tap reports Zola-1 (Santos 24.75%) reached 4,374m in the Mungaroo, with limited logs supporting a gas column in sandstones at the top of the formation. The well is suspended ahead of a cyclone. Gas thickness is unconfirmed until full logging.

drilling progress report

Santos reports 2010 net profit of A$500m (up 15%) and underlying A$376m (up 46%), on production of 49.9 mmboe, down 8%. Final dividend 15 cents. Kipper first gas is deferred beyond 1H 2012. GLNG stake sales to Total and KOGAS expected to close by end-February.

annual report

Santos lifts year-end 2010 2P reserves to 1,445 mmboe, a 110% replacement ratio and seventh straight annual rise, after 165 mmboe added. GLNG 2P coal seam gas reserves are 5,009 PJ. Henry and Netherby 2P cut 14 mmboe, confirming the earlier Otway downgrade.

resource reserve update

AWE reports that Santos, operator of the Otway fields Casino, Netherby and Henry, cut initial 2P reserves from 602.5 PJ to 448.5 PJ (100% basis). AWE, with 25%, says contract gas volumes are not expected to be affected.

resource reserve update

BHP says Esso-operated Kipper (Santos 35%) costs rise to US$900m for BHP's share, with facilities now due in 2012. Mercury found in the reservoir means first production timing depends on resolving it. Earlier Kipper 2011 timing now looks later.

joint venture update

GLNG partners take final investment decision on the US$16bn, 7.8 mtpa two-train project; Santos's 30% share of capex is US$4.8bn. First LNG is due 2015, a year later than the 2014 earlier expected. Santos expects S&P to affirm BBB+.

material agreement

Santos completes its heavily oversubscribed institutional placement: about 39.8m shares at A$12.55, roughly A$500m, completing equity funding of its GLNG share. Settlement is 23 December and the trading halt is lifted. This completes the raising announced on 17 December.

capital raising announcement

GLNG signs a binding 3.5 mtpa, 20-year (15 binding plus 5 option) LNG sale to KOGAS, bringing contracted volume to 7 mtpa. Santos sells 7.5% each to KOGAS and Total for A$665m, leaving it at 30%, and raises about A$500m at A$12.55. FID is due by end January 2011.

material agreement

Partner Tap reports Zola-1 (WA-290-P, Santos 24.75%) has spudded. Tap estimates mean recoverable gas of 1.0 tcf with 2.0 tcf upside, with the well planned to about 5,000m in 40-50 days. This is a significant exploration well for Santos.

drilling spud

Santos approves development of the Wortel gas project in the Sampang PSC (Santos 45%, op) at US$100m gross, with first gas by end 2011. Gas goes to PT Indonesia Power; Santos's share of 2P reserves is about 8 mmboe. This follows the Wortel 2011 plan.

material agreement

Santos farms into Octanex's WA-323-P and WA-330-P in the Carnarvon Basin, earning 75% and operatorship by shooting 3D seismic, drilling one well and reimbursing past costs. Octanex is carried on 25%. Subject to approvals and permit renewals.

farm in farm out agreement

Spar-2 (Santos 45%, Apache op) found 55m net gas pay and flowed 58 mmcf/d, so the Spar resource is expected to be well above the 335 PJ gross previously stated. It will tie back via Halyard; the rig moves to Zola-1.

drilling result

Santos elects to proceed to Phases 2B and 2C of the PEL 456 farm-in with Apollo Gas, drilling a multi-well pilot and a further corehole to earn another 35%. This resolves the 15 November decision; Apollo cites encouraging Brawboy-Cuan results.

farm in farm out completion

PNG's Minister refused to extend PRL 5, in which Santos is a joint venture partner with Horizon and Talisman. The partners say the decision is contrary to law and are considering legal options. Stanley-2 on PRL 4 is unaffected.

regulatory community update

Santos agrees to buy Cairn Energy's Bangladesh Block 16 (Sangu) and Block 16 (Exploration) interests, lifting its Sangu stake from 37.5% to 75% and making it operator; Halliburton keeps 25%. Terms confidential; completion expected by end 2010.

asset acquisition disposition

Santos agrees to supply 750 PJ of eastern Australian portfolio gas, mainly uncontracted Cooper Basin 2P reserves, to GLNG over 15 years from 2014, oil-linked priced. It is conditional on GLNG train 2 FID, with no material capex needed before 2014.

material agreement

GLNG receives Federal environmental approval, following Queensland's approval in May 2010. This clears the last government approval flagged as pending; train 1 FID is still targeted by end 2010, with train 2 FID in 2011.

regulatory community update

Santos prices a €300m (about A$420m) follow-on hybrid at an implied yield of about 8.05%, lifting total hybrid funding to €1bn (about A$1.4bn). S&P gives 100% equity credit. It further reduces potential equity need for GLNG, with FID planned before year end.

capital raising announcement

Andrew Seaton, 45, is appointed Deputy CFO and will become CFO when Peter Wasow retires at the end of 2010. This resolves the CFO successor search flagged earlier, and is an internal appointment.

director officer appointment

Santos issues a €650m (about A$900m) hybrid at 8.25% fixed for 7 years, 60-year term, with 100% S&P equity credit and no conversion into shares. It reduces any future equity need dollar for dollar; GLNG FID on train 1 still expected by end 2010.

capital raising announcement

Santos sells 15% of GLNG to Total for A$650m, cutting its stake from 60% to 45% (PETRONAS 35%, Total 20%). Binding LNG offtake now totals 5 mtpa (PETRONAS 3.5, Total 1.5), underpinning two trains. PETRONAS no longer pays extra on later trains.

asset acquisition disposition

Santos sold 55% of its Spar (WA-4-R) interest to Apache for US$31m upfront, with up to US$85m more depending on Spar 2 reserves. Santos keeps 45% of Halyard and Spar; Apache operates. Halyard is due online mid 2011, with about 335 PJ gross recoverable.

farm in farm out agreement

Santos reported first-half net profit of A$198m (up 94%) on higher prices and lower exploration spend, with a 22c interim dividend unchanged. Production fell 9% to 24.2 mmboe on floods. Funding capacity is A$6.4bn; GLNG FID is still targeted for later in 2010.

half year report

CFO Peter Wasow will retire at the end of 2010 after eight years in the role, staying until then or until a successor is appointed. A search has begun. The change comes as Santos works on its GLNG funding strategy.

director officer appointment

Santos signed a A$2bn bilateral bank facility with tenors of four to seven years, replacing A$700m of undrawn facilities. Total funding capacity rises to A$6bn (from A$5.06bn at FY2009), helping fund GLNG and PNG LNG construction.

debt financing

Santos acknowledges media speculation about GLNG, saying it is in detailed talks with several parties on LNG sales, project equity and collaboration between projects. Nothing is agreed and there is no certainty of deals. Hints at possible partners or buyers ahead of the planned 2010 final investment decision.

price query

GLNG won Queensland environmental approval, the first for a coal seam gas to LNG project in Australia, covering 2,650 wells, a 435-km pipeline and up to three trains. Federal approval is still needed before a final investment decision this year; partners flag concern over the proposed resources tax.

regulatory community update

Santos named Fluor Australia preferred EPC contractor for GLNG's upstream facilities and extended Fluor's design contract with about A$50m of early works. A full EPC contract is expected only after a final investment decision; first LNG remains 2014.

contract award

March quarter production was 12.4 mmboe (down 6% on a year earlier), hit by Cooper Basin floods. 2010 production guidance was cut 2 mmboe to 49-52 mmboe and capex guidance lowered from A$2,800m to A$2,600m. Confirms the flood disruption flagged earlier.

quarterly activities report

Santos agreed to sell its entire 40% operated interest in Evans Shoal (NT/P 48) to Magellan for up to A$200m: A$100m cash, A$50m on a development decision and A$50m on first gas. Completion expected 2H 2010, subject to approvals. Follows the 2009 Petrel/Tern/Frigate sale.

asset acquisition disposition

PNG LNG cleared its final conditions: sales agreements and lender financing are complete and full execution proceeds. Project cost is about US$15bn, Santos' share US$2bn; first LNG 2014. Santos' share is about 9 mmboe a year at plateau.

material agreement

PNG LNG (Santos 13.5%) finalised a binding 20-year sale agreement with Taiwan's CPC for about 1.2 mtpa. All of the project's 6.6 mtpa capacity is now committed; lender financing is expected later in March.

material agreement

AWE reports first gas from the Netherby field in VIC/P44 (Santos operator, 50%), ahead of the mid-2010 date. Ramp-up of Henry and Netherby continues. Henry was guided by Santos for first gas in 1H10.

production update

Santos reports 2009 net profit A$434m (2008: A$1.7bn, boosted by the GLNG sale), underlying A$257m, on lower prices. Production 54.4 mmboe, cash A$2.2bn, about A$5bn funding capacity. GLNG FID still mid-2010; PNG LNG financial close expected by end March.

annual report

Santos reported 2009 net profit of A$434m, down 73.7% from 2008's GLNG-sale-boosted result; underlying profit A$257m, down 53.1%. Final dividend 20 cents fully franked, payable 31 March 2010. Preliminary Appendix 4E filing.

annual report

Santos's 2P reserves rose 42% (427 mmboe) to a record 1.44 billion boe at end-2009, a 885% replacement ratio. CSG 2P reserves rose 60% to 3,748 PJ, including first Gunnedah bookings of 724 PJ. GLNG 2P reserves are 4,003 PJ.

resource reserve update

ESG's independently certified 2P gas reserves at Narrabri (PEL 238, Santos 35%) rose 152% to 1,520 PJ, beating the 1,300 PJ target. 3P rose to 2,797 PJ. Builds on the Gunnedah CSG position Santos is buying into.

resource reserve update

Formal ASX notice that Stephen Gerlach has stepped down as chair, effective 9 December, with Peter Coates taking over. This is earlier than the 31 December date previously flagged for the handover.

director officer appointment

PNG LNG co-venturers took final investment decision on 8 Dec, subject to buyer agreements and financing. Santos's share falls to 13.5% after PNG government nominees join; its share of cost is US$2bn. 218 mmboe moves to 2P reserves (+22%); about 9 mmboe a year at plateau. Resolves the pending FID.

farm in farm out completion

Oil Search forwards ExxonMobil's release: PNG LNG participants signed a binding 20-year agreement with TEPCO for about 1.8 mtpa of LNG, following the Sinopec deal. Santos holds 17.7% of the project. Same event for Santos' own story.

material agreement

Santos announces PNG LNG (Santos 17.7%) finalised a binding 20-year sale agreement with Sinopec's Unipec for about 2.0 mtpa of LNG, for a terminal in Shandong. This converts the 4 November Heads of Agreement into a binding contract.

material agreement

Santos announces PNG LNG (17.7%, about 13.7% after the PNG government back-in) signed a Heads of Agreement with Sinopec's Unipec for 2 mtpa of LNG. A binding sale agreement is being finalised; FID is still targeted for later in 2009.

material agreement

ExxonMobil's preliminary estimate puts PNG LNG Phase 1 capex at about US$15bn, up from US$12.5bn pre-FEED, mainly from scope changes and US$600m of pre-start-up costs. Plant output rises to 6.6 mtpa. FID is still targeted for December 2009, first gas late 2013/early 2014.

joint venture update

Santos announces first gas from Oyong Phase-2 in Indonesia (Santos 45% operator), on time, with plateau of about 50-60 mmscfd gross. This delivers the project sanctioned in December 2007 and flagged for 3Q09 in earlier updates; gas is sold to PT Indonesia Power Grati.

production update

Santos confirms the A$600m FUELS will be redeemed at A$100 each on 30 September 2009, with a final fully franked dividend of A$1.6191 per FUELS. Trading ends 23 September. This carries out the use of equity-raising proceeds announced in May.

security holder rights change

Santos reports first-half net profit of A$102m, down 66%, as the average oil price fell 39% to A$73.28. Production was 26.6 mmboe and cash and deposits A$3.6bn after the equity raising. Interim dividend unchanged at 22c; LNG projects on track.

half year report

ESG says certified 2P reserves at Narrabri (PEL 238, Santos 35%) rose 79% to 602 PJ at 30 June 2009 (from 336 PJ). The venture remains confident of at least 1,300 PJ 2P by end 2009, the target tied to Santos' July purchase.

resource reserve update

Santos sells 60% of the Petrel, Tern and Frigate gas fields to GDF SUEZ for US$200m, plus US$170m on a final investment decision and a full carry of pre-FEED and FEED costs, for a floating LNG project. Santos keeps 40% and books about A$160m after-tax profit in 2H09.

asset acquisition disposition

Santos announces a gas discovery at Burnside-1ST1 in the Browse Basin, with a 65 m gross gas column in the Brewster Sandstone. This resolves the well pending since June. Santos holds 47.83%; commercial significance and an appraisal plan are still to come.

drilling result

Santos agreed to pay A$476m to expand its Gunnedah Basin coal seam gas position: A$300m for Gastar's 35% of Eastern Star Gas-operated permits and A$176m for 19.99% of ESG at A$1.00 a share. Combined acreage is about 63,000 sq km, building on Santos' own Gunnedah program.

asset acquisition disposition

PNG LNG partners aligned commercial terms with three Asian buyers for about 4.3 mtpa. A fourth buyer awaits government approval for the remaining 2 mtpa. FID is now targeted for Q4 2009. Santos expects about 13.7% after the PNG government back-in.

material agreement

GLNG signed a binding heads of agreement to sell 2 mtpa of LNG to PETRONAS for 20 years from 2014, with an option for 1 mtpa more. It underpins the first train and is conditional on FID, still expected in 1H 2010.

material agreement

Santos completed the retail part of its equity raising, taking the total to about A$3bn at A$12.50. Valid applications were about A$1.1bn; about 72m shares go to retail holders and about 25m to sub-underwriters. Trading begins 17 June.

capital raising announcement

Santos agreed to sell its 50.353% operated stake in PNG's PRL 5 (non-producing, not part of PNG LNG) for US$20m. It is part of a non-core asset sales program; guidance and reserves are unchanged and the gain or loss is unlikely to be material.

asset acquisition disposition

The institutional part of the equity raising was completed, heavily oversubscribed, raising about A$1.75bn at A$12.50. The retail offer, now underwritten, adds about A$1.25bn, for roughly A$3.0bn total. Retail offer closes 5 June; new shares are issued 16 June.

capital raising announcement

Santos launched a 2-for-5 entitlement offer at A$12.50 a share, raising at least A$1.65bn from institutions and up to A$1.35bn more from retail holders. A$1.05bn funds PNG LNG, A$600m redeems FUELS. 2009 guidance and the 42c dividend intent are maintained.

capital raising announcement

Santos submitted its draft Environmental Impact Statement for the Gladstone LNG project on 30 March, almost 13,500 pages. It is a required approval step, and the State Government will review it before public release and comment.

regulatory community update

Chairman Stephen Gerlach will retire on 31 December 2009 after eight years as chairman, and Deputy Chairman Peter Coates takes over. Director Judith Sloan will also leave at the next AGM.

director officer appointment

South July-1 in Egypt reached 3,927 m with hydrocarbon shows at the top of the Yusr Member, but did not reach the Nubia target because the Lower Rudeis was thicker than expected. A sidetrack proceeds without Santos (40% operator), which opted out.

drilling result

Apache, operator of the Reindeer JV, signed the Devil Creek gas plant construction contract with Clough. This satisfies the condition on the January Sino Iron gas sales agreement, so Reindeer (Santos 45%) will supply gas from 2H 2011 at up to 215 TJ/d.

contract award

Santos lifted 2P reserves by 134 mmboe to a record 1,013 mmboe, passing 1 billion barrels, versus 879 mmboe a year earlier. GLNG CSG 2P reserves rose 142% to 3,246 PJ. Contingent resources rose to 2.85 billion boe, including a 590 mmboe Cooper unconventional gas booking.

resource reserve update

Santos signed a gas contract with CITIC Pacific's Sino Iron project: 75 PJ over seven years from 2H 2011, worth about US$585m net to Santos at US$50 oil. It is conditional, but if met it lets the Reindeer project, deferred in December, restart.

contract award

Santos and PETRONAS appointed Bechtel as downstream FEED contractor for Gladstone LNG (about US$40m contract), following the dual pre-FEED. Final investment decision is now expected in the first half of 2010, with first gas in 2014 still targeted. The A$7.7bn cost estimate (2007 dollars) will be re-estimated in FEED.

contract award

Santos is transferring its 18% Brantas PSC interest, site of the Sidoarjo mudflow, to Minarak, linked to the operator, for a US$22.5m payment covered by the existing provision. Santos gets releases from participants, but cannot rule out future third-party claims. Resolves the open mudflow exposure.

asset acquisition disposition

The Reindeer JV (Santos 45%, Apache 55% operator) deferred the gas field and Devil Creek plant, citing the economic outlook hitting the foundation gas customer. This delays the end-2010 first gas set at the April 2008 FID; work continues on approvals.

asset acquisition disposition

Santos appointed Ray Betros, 54, from BG Group, to the new role of Executive Vice President Technical, reporting to CEO David Knox, starting early January. His LNG project experience is cited as suiting Santos's growth strategy.

director officer appointment

AWE reports Henry-2 DW1 ST1 cleaned up at about 44 MMcf/d, limited by surface facilities. The campaign lifted block gas reserves, and the Henry and Netherby pipeline to Casino is due 1H 2009. The rig is being released, ending the drilling phase after the earlier casing setback.

flow test result

Santos signed a gas supply contract with Moly Metals for the Spinifex Ridge mine, about 33 PJ over six years from mid-2010, worth roughly US$380m at US$90 oil. It needs about A$45m net spent on East Spar pipeline capacity. Conditional on Moly raising capital.

contract award

Santos bought 100% of WA-4-R, containing most of the undeveloped Spar gas field, from the Gorgon JV participants, for undisclosed terms. Spar holds up to 600 PJ of gas and up to 8m barrels of condensate. Subject to approvals.

asset acquisition disposition

Vicpet reports Cuisinier-1 (ATP 752P, Santos operator) flowed light oil from the Murta sandstone, recovering 104.5 barrels in about 29 hours. It will be completed as a pump producer. Confirms the oil discovery, though a stable rate is not yet known.

well test result

Santos announces a roughly A$300m off-market buy-back, funded from cash boosted by PETRONAS proceeds, at tender discounts of 8-14% to market price. It will also repay some debt, and the dividend reinvestment plan is underwritten for three dividends. This returns part of the GLNG proceeds to shareholders.

capital raising announcement

Santos proposes a nominal 500 MW gas-fired Shaw River power station near Orford, Victoria, est. cost A$800m, expandable to 1,500 MW. FEED starts now; FID expected by end 2009, first power 2012. It is Santos' first move into power generation and remains subject to approvals.

business combination

AWE reports the Netherby-1 development well cleaned up at an estimated 51 million cubic feet of gas a day, constrained by surface facilities. It is in Santos-operated VIC/P 44 (Santos 50%), and Henry-2 follows. Supports Henry-area first gas in H1 2009.

flow test result

AWE says Netherby-1 in VIC/P 44 (Santos operator, 50%) found good-quality gas-bearing Waarre A sandstone, in line with pre-drill expectations. It is being sidetracked as a producer tied to Henry and Casino, with Henry-2 to follow. This offsets the earlier Pecten East dry hole.

drilling result

David Knox, Acting CEO since March 2008, is appointed permanent CEO and Managing Director after an international search that also considered external candidates. Fixed pay is A$1.75m. This resolves the CEO succession open since Ellice-Flint's retirement.

director officer appointment

Bow reports Santos' Hudson-1 in ATP 752P was plugged and abandoned as a dry hole at 2,430 m, after logs showed only residual oil. This follows the Cuisinier-1 oil discovery. Bow still sees other prospects between the two wells.

drilling result

Santos confirms the PETRONAS deal for 40% of Gladstone LNG is now unconditional after regulatory approvals, including from FIRB, and will complete shortly. PETRONAS pays US$2.008bn on completion, plus US$500m at final investment decision on a second train.

farm in farm out completion

AWE reports Pecten East-1 in Santos-operated VIC/P 44 reached 1,993 m; gas shows were proven residual, so the well found no producible gas. It was drilled down-dip, and the joint venture is considering a separate crestal well.

drilling result

Operator Apache expects John Brookes gas processing at about 200 TJ/d gross, Santos 45%, to restart in mid-August after the 3 June Varanus Island incident. Santos estimates a 2008 net production loss of 1.2 mmboe, which should affect the 56-58 mmboe guidance.

production update

An incident at Varanus Island halted all production, including the John Brookes field where Santos holds 45%. The field is undamaged but shut in. Santos' Q1 2008 equity production from it was 1.36 mmboe.

production update

Santos sells PETRONAS a 40% interest in Gladstone LNG for US$2.008bn, plus US$500m on a final investment decision for a second train. Santos keeps 60% and upstream operatorship. Completion needs FIRB approval, expected within 3 months, which resolves the partner search.

farm in farm out agreement

PNG Government signed the Gas Agreement and PNG LNG formally entered FEED, resolving the pending approval. Santos holds 17.7%; FEED runs 16 months with a final investment decision expected Q4 2009 and first LNG early 2014.

material agreement

Chim Sao North appraisal well in Vietnam Block 12W flowed oil from two zones, 1,650 bopd and 2,680 bopd, with no water. It will be suspended as a future producer, supporting a development decision on Chim Sao, where Santos holds 37.5%.

well test result

Third-party Bow release: Santos-operated Cuisinier-1 was cased and suspended as a potential new oil discovery, with 6 m of net oil pay at 1,622-1,630 m. Next farm-in well, Hudson-1, is planned for late June 2008.

drilling result

Santos will not seek to reopen the Moonie to Brisbane oil pipeline, closed since a July 2007 leak in Algester, citing the expense and difficulty of proving its integrity. Its book value was already fully written off in 2007 accounts, with a decommissioning provision made.

regulatory community update

Santos awarded parallel six-month pre-FEED contracts to Foster Wheeler and Bechtel for Gladstone LNG, comparing two liquefaction technologies. The schedule is unchanged: FEED decision around end-2008 or early 2009, FID end-2009, first LNG early 2014.

contract award

Final investment decision taken on the Reindeer gas project offshore WA (Santos 45%, Apache 55% operator). Santos' share of capital cost is A$379m; first gas is targeted end-2010, later than the earlier 2010 expectation. 2P reserves are about 485 PJ, Santos share about 220 PJ.

asset acquisition disposition

Managing Director John Ellice-Flint, CEO since 2000, stepped down immediately and will consult until 30 June 2008. EVP David Knox is Acting CEO while an international search runs; the chairman expects Knox to be a strong candidate.

director officer appointment

Mutineer-Exeter oil production has restarted after electrical repairs on the FPSO, following the early-February shutdown. Gross output is expected at 20,000-22,000 bopd, in line with guidance. Full electrical repairs are expected in 2009; a workover starts in Q2 2008.

production update

Santos welcomes the PNG LNG Joint Operating Agreement signed with ExxonMobil, Oil Search, Nippon Oil, AGL and MRDC. Santos's equity entering FEED would be 17.7%. The JV now aims to secure a FEED entry decision as quickly as possible.

material agreement

2007 EBITDAX A$1,733m and net profit A$441m (-32%); full-year dividend held at 40c. 2P reserves rose to 879 mmboe (178% replacement) and contingent resources 15% to 2.6bn boe. Strategy shifts toward Asian LNG pricing via Gladstone LNG.

annual report

South Jakarta court rejected all claims by environmental group WALHI over the Sidoarjo mud flow; Brantas PSC participants (Santos 18%) successfully defended. WALHI has 14 days to appeal. Santos already carries a net A$67m provision for the incident.

regulatory community update

Mutineer-Exeter (Santos 33.4% operator) is producing only 4,000-5,000 bopd gross after electrical damage disabled the sub-sea pumps. Impact is 0.1-0.17 mmbbl net in 2007, and 0.17-0.34 mmbbl net in 2008 if repaired by April. Adds to the field's earlier dry Mutineer-13 well.

production update

Third-party BHP release: Kipper gas field development approved, with first production in 2011. Cost is about US$1.1bn. Santos holds 35% (the stake the context shows it was buying from Woodside), and BHP and Esso hold 32.5% each.

material agreement

Santos welcomed sanction of the Kipper gas project (Santos 35%): first gas targeted H1 2011 at about 75 TJ/d gross. 2P reserves are about 610 PJ plus 30 mmboe of liquids. Santos's Stage 1 share is about A$140m. Follows Henry last month.

material agreement

Santos and partners sanctioned the Henry gas field development (VIC/P44, Santos 50% operator): capex A$275m (Santos A$138m), first gas targeted H1 2009 via Casino infrastructure. 2P reserves are about 150 PJ (Santos ~75 PJ).

material agreement

South Australian Parliament passed the law repealing the 15% single-shareholder cap, following the 16 October decision. It needs Royal Assent, expected by year end, then a 12-month transition before the cap ceases. A takeover barrier is being lifted.

security holder rights change

Mutineer-13 appraisal well found its main reservoir low to prognosis and water saturated, and will be plugged and abandoned. No change to 2P reserves, but some possible 3P upside is removed. Workovers on existing wells follow; more drilling planned from Q2 2008.

drilling result

Santos bought Cairn Energy Bangladesh: 37.5% of the Sangu gas field (34 mmcfd net, about 34 bcf 2P) plus exploration acreage, for US$50m cash and up to US$20m contingent. A new country entry, extending its Asian strategy after India.

asset acquisition disposition

Q3 production was 15.0 mmboe, 10% below a year earlier; 2007 guidance narrowed to 59-60 mmboe. The 2008 Cooper Oil program is cut to about 90 wells (from ~190 in 2007), lowering the oil outlook versus earlier guidance. PRRT guidance rises to $80-90m.

quarterly activities report

Bow signed the formal ATP 752P farm-in with Santos and Avery, following the 28 August letter of intent. Up to 7 oil wells and 300 km2 of 3D seismic (about $18.5m); Bow carried and keeps 15%. Santos becomes operator, first wells early 2008.

farm in farm out agreement

SA Government will repeal the 15% shareholder cap, after Santos' 15 June submission, subject to Parliament and a 12-month transition. Santos gave binding undertakings: keep SA roles (about 90% of SA workforce), $60m community funding, up to $100m compensation if breached.

regulatory community update

Santos announced first oil from the Oyong field (Sampang PSC, Santos operator 45%), as expected for September. Gross rates should settle at 8,000-10,000 bopd. Gas FID is expected by end 2007, with first gas in H1 2009 (earlier noted as late 2008).

production update

Santos released the SA Premier's statement: talks continue on lifting the 15% shareholder cap, with a decision due by end of September. Premier is not opposed but wants Santos to keep a significant corporate presence in South Australia, even after a takeover.

regulatory community update

Third-party Tap update: the Fletcher-2 sidetrack in WA-191-P (Santos operator 33.4%) found a 12 m gross (4 m net) oil column, slightly up dip of Fletcher-1, and will be plugged and abandoned. Tap expects a small resource near the wells but the wider Fletcher trend could be significant.

drilling result

Third-party Bow announcement: Bow signed a letter of intent with Santos and Avery expanding the ATP 752P farm-in (Cooper-Eromanga) from 3 to 7 oil wells plus 300 km2 of 3D seismic, about $18.5m total. Santos becomes operator; Bow is fully carried and ends with 15%.

farm in farm out agreement

Santos's half-year report to 30 June 2007: underlying profit fell 24.9% to $305.2m and net profit fell 29.2% to $261.6m. Revenue fell 7.4% to $1,231.4m. Interim dividend of 20 cents is maintained, payable 2 October 2007.

half year report

Santos reported first-half underlying profit of $305m, down from $407m, despite record production of 30.1 mmboe. Sales revenue fell 7% to $1,215m on the higher Australian dollar. Interim dividend held at 20 cents; 2007 guidance of 59-61 mmboe unchanged.

half year report

Third-party Tap update: Fletcher-1 (WA-191-P, Santos operator 33.4%) logs confirmed an 8 m oil column with good oil samples, against a pre-drill prediction of 20-30 m. A sidetrack up dip will help establish the size of the accumulation.

drilling result

Santos started front-end engineering and design for the Reindeer gas field (WA-209-P, Santos 45%, Apache 55% operator), with 410-640 PJ gross recoverable, about 110 TJ/day, and first gas targeted mid 2010. Field was discovered in 1997.

investor presentation

Third-party Tap announcement: Santos-operated Totem-1 (WA-191-P, Santos 33.4%) reached planned depth but is not an oil discovery; any oil is low saturation and not producible. It will be plugged and abandoned, a dry hole near the Amulet discovery.

drilling result

Santos's interest in the Bayu-Undan LNG, LPG and condensate development rose from 10.6% to 11.4% after a formal redetermination, backdated to the start of development. Santos will receive a cash adjustment for its higher share of past revenue net of past costs.

asset acquisition disposition

Third-party Mosaic update: Hurricane-2 (WA-208P, Santos-operated, 31.31%) found a roughly 20 m gross oil column (about 10 m net pay), a new oil and gas discovery. Mosaic says it is unlikely to be commercial on its own now; the joint venture will review.

drilling result

Santos proposed a 3-4 million tonne a year LNG plant at Gladstone, costing A$5-7bn, fed by its Queensland coal seam gas. Final investment decision is targeted by end 2009, first cargoes early 2014; Queensland granted significant project status. About $200m is planned for 2008.

asset acquisition disposition

Santos agreed to sell all its US exploration and production interests for US$70m (A$82m), subject to conditions, and keeps a 17.5% net profits interest in three Texas prospects. This completes the exit announced 11 December 2006 to focus on Australia, Asia and the Middle East.

asset acquisition disposition

Santos appointed David Knox, currently BP's Australasia Managing Director, to the new role of Executive Vice President, Growth Businesses. He will report to the Managing Director and lead new ventures, Indonesia and strategic projects.

director officer appointment

Santos signed a farm-in with Carbon Minerals' subsidiary over PELs 1 and 12 (Gunnedah Basin, NSW, over 7,000 sq km). Spending $10m earns 25%; a further $30m earns another 40%. Santos would operate.

farm in farm out agreement

South Australia's Premier agreed, at Santos's request, to review the 15% single-shareholder cap in place since 1979, with the outcome due by end September 2007. Santos's board says the cap is not in shareholders' long-term interest.

regulatory community update

Santos signed conditional contracts with Nexus to process and buy up to 350 PJ of Longtom gas over at least 10 years through its Orbost plant, starting between Q3 2008 and Q1 2009. Santos also holds an option on up to 35% of Longtom.

contract award

Santos signed a cost sharing agreement with ExxonMobil, Oil Search and Nippon Oil for a pre-FEED study of a 5.0-6.5 mtpa PNG LNG plant based on Hides (Santos 25%), targeting first cargo in 2012-13. Santos funds 17%; the study is due by end 2007.

material agreement

Santos reported 2006 underlying profit up 7% to a record $683m, reported profit $643m, production up 9% to 61.0 mmboe, and a 20c final dividend (40c for the year). 2P reserves are 819 mmboe, and 2007 capex is cut to $1,180m with 14 wildcats.

annual report

Third-party Sundance announcement: Santos can earn into three Cooper Basin tenements in Queensland (ATP 636P, 820P, 661P) and become operator. Santos funds about A$3m of seismic and a well in each of two tenements to reach 60%. The permits are not yet granted.

farm in farm out agreement

Santos said the ACCC decision means the first condition of its 15 February QGC offer will not be met by the 5 March deadline, so it does not intend to proceed. The QGC bid ends, leaving the AGL deal as QGC's alternative.

business combination

The ACCC said it will oppose Santos's proposed QGC acquisition, finding that even with the undertakings (30% of NewCo, 100 PJ gas access) it would likely substantially lessen southern Queensland wholesale gas competition. This undermines the 15 February offer's key condition.

regulatory community update

Santos lodged a formal offer for QGC of at least $1.80 a share (about $960m): $1.30 cash plus one New QGC share valued at 50c or more. It lifts the gas put option from 60 to 100 PJ and is open to 5 March, subject to conditions.

business combination

Santos won two deepwater exploration blocks in India's Bay of Bengal (100% and operator, about 16,500 sq km), with an eight-year US$70m work program including one well. It is Santos's third new country entry since August 2005, after Kyrgyzstan and Vietnam.

contract award

Caldita-2 (NT/P61, Santos 40%) reached 3,973 m and confirmed gas in the western Caldita structure, with the gas-water contact confirmed. It was not flow-tested and was plugged as planned. 3D seismic is due by end of Q1 2008 before resources are assessed.

drilling result

Santos proposed a new deal for QGC: $1.30 cash per share for its Undulla Nose assets, plus shares in a spun-off 'New QGC' that Santos values at about $0.50, implying about $1.80 in total. Santos would take 30% of New QGC for about $40m. The $1.26 offer will lapse. Deal is conditional and non-binding.

business combination

Santos reported record 2006 production of 61.0 mmboe and record sales revenue of $2.77 billion. Q4 production was 15.4 mmboe. 2007 guidance was cut to 59-61 mmboe from 62-63, because of the planned US sale and uncertainty over Maleo offtake constraints.

quarterly activities report

Santos won a new gas supply contract worth over $90 million with Newmont Australia, supplying the Jundee gold mine and Parkeston power station for three years from 1 January 2007. Gas comes from the John Brookes field (Santos 45%), adding to earlier Western Australian contracts.

contract award

The Takeovers Panel declined to find unacceptable circumstances in Santos's complaint about QGC's target's statement, after QGC agreed further disclosures. It noted QGC's proposed AGL and Sentient transactions; this resolves Santos's application, leaving a competing AGL proposal to be voted on in February 2007.

regulatory community update

Blackbird oil discovery in Vietnam's Block 12E flowed 2,177 and 3,706 barrels of oil per day from two zones, with no water, and will be sidetracked for appraisal. Vietnam approvals for the Premier farm-out are received, so Santos is finalising its 37.5% interest.

well test result

Santos plans to sell all its US exploration and production interests (2.1 million boe produced in 2005, over 180,000 gross acres in Texas and Colorado), appointing Scotia Waterous. It redeploys capital to Australia, Asia and the Middle East, reversing earlier Jaguar/Cougar Texas activity.

asset acquisition disposition

Third-party filing by Innamincka: it will exercise pre-emption on VFI's 65% of PEL 103 (US$8m), blocking Santos there. It did not pre-empt ATP 543P South, so Santos's US$9m for VFI's 50% proceeds, making Santos a partner.

asset acquisition disposition

Third-party filing by Pan Pacific: Bricklanding-1 reached 3,000 m with no hydrocarbon shows or log anomalies and will be plugged and abandoned. A dry hole for Santos, which holds 63.369% as technical operator.

drilling result

Third-party filing by Innamincka: partner Vernon Faulconer accepted Santos offers to buy its Cooper Basin interests, US$8m for 65% of PEL 103 and US$9m for 50% of ATP 543P South, US$17m total. Innamincka has 10 days to match.

asset acquisition disposition

Santos's Barossa-1 in the Timor/Bonaparte basin confirmed gas, flowing about 30.1 million cubic feet per day from the better interval, limited by equipment, with about 16% carbon dioxide. Santos holds 40%. Caldita-2 appraisal and 3D seismic follow.

well test result

Santos says the Jeruk oil discovery's upside recoverable resource is most likely under 50 million barrels, with substantial uncertainties. Further appraisal drilling is on hold pending development review. This follows the disappointing Jeruk-3 appraisal.

resource reserve update

A Pertamina gas pipeline failure near the Banjar Panji 1 site caused casualties, and Santos shut in Maleo gas production. Maleo, which began flowing 3 October, was about 7,000 boe/d net to Santos before the incident.

production update

Santos applied to the Takeovers Panel, claiming QGC's Target's Statement is deficient and omits a recent expert reserves report. It wants the statement withdrawn and replaced. The Panel has not yet decided whether to hold proceedings.

business combination

Santos's Blackbird well in Vietnam Block 12E found four oil-bearing intervals with over 70 m net pay at 4,058 m, following the Dua finds. Flow tests are being prepared. Vietnam approvals for the Premier farm-out to 37.5% are also now received.

drilling result

Santos signed a production sharing contract for Block 101-100/04 in Vietnam's Song Hong Basin, holding 55% as operator with Singapore Petroleum on 45%. The commitment includes one exploration well in the first three years. This adds to its Dua discovery position in Vietnam.

material agreement

The competition regulator (ACCC) issued a Statement of Issues on Santos's QGC bid, flagging competition concerns and market definition questions. Submissions are due 9 November, with a final decision expected 7 December. This is a regulatory hurdle for the takeover, not a block.

regulatory community update

Santos released the Lapindo update on the Banjar Panji mud flow: the operator's cost estimate rose from US$100m to US$180m. Santos's 18% share is about A$43.7m (7.4c per share) before insurance, against its A$24.3m provision. Insurance response is uncertain.

regulatory community update

Dua-5X in Vietnam's Block 12E flowed 5,543 bopd and 6.76 mmscf/d of gas from the main reservoir and 247 bopd from a deeper one, no water. This confirms the 21 September discovery. Santos is 75% now, 37.5% after farm-out. Blackbird is next.

well test result

QGC's board unanimously rejected Santos's $1.26 per share offer as 'opportunistic and patently inadequate'. It says QGC shares closed at $1.445 the day before, above the offer. The bid is now hostile, and a higher price may be needed.

business combination

Wortel-2 appraisal well in the Sampang PSC (Santos 40.5% operator) reached 1,421 m and found no significant hydrocarbons in the 'C' fault block, so it will be plugged. Wortel-3 is planned to test the 'B' block after Semangka-1 in the Madura Offshore PSC.

drilling result

Santos, through Santos CSG Pty Ltd, is preparing a takeover offer for Queensland Gas Company, with a 50.1% minimum acceptance condition and standard no-material-adverse-change conditions. This announcement is the conditions only; the price is not in the visible text (truncated).

business combination

Santos launched an all-cash offer of $1.26 per share for Queensland Gas Company (QGC), valuing it at $606m, via its subsidiary. It holds 3.9% and needs 50.1%. Debt-funded, consistent with a BBB+ credit rating. Resolves the earlier unpriced QGC item.

business combination

First gas flowed from the Maleo field (Madura Offshore PSC, Santos 67.5% operator), Santos's first operated offshore project outside Australia. The US$75m project is on schedule and budget, with plateau up to 110 mmscfd for about 5 years and 240 bcf reserves. This resolves the 'Maleo gas 2H 2006' item.

production update

Santos appointed Roy Franklin OBE, 53, a UK-based former Paladin Resources CEO and BP geologist, as a director with immediate effect. The chair says it reflects Santos expanding its international focus. No replacement had been named after Christopher Recny's death in June.

director officer appointment

Korea National Oil Corporation (15-25%) and Samsung Corporation (10%) will farm into Santos's Jaguar/Cougar shallow-water Texas exploration project. Santos calls it portfolio management to share exploration risk. Santos's remaining interest and any payment are not stated.

farm in farm out agreement

Dua-5X RE in Vietnam Block 12E found multiple gas and oil reservoirs in the southern fault block of the Dua structure, adding to the Dua-4X find. Drill stem testing is being prepared; Blackbird is next. Santos goes to 37.5% once farm-in is approved.

drilling result

Third-party filing by Pan Pacific: Libris ST-1 reached 3,481 m and logs showed sub-economic oil discoveries in the Upper and Lower Angel Formation. The well will be plugged and abandoned. Santos holds 15%.

drilling result

Third-party filing by Westpac Funds Management: it has terminated its Implementation Agreement of 16 July 2006 with Santos, which relates to the Australian Onshore Energy Fund. The filing gives no reason. Inference: this ends the Delhi deal route with that fund.

material agreement termination

Third-party filing by Cue: Wortel-1 flowed 18.5 mmcf/d from a 141 m gross gas column in the Mundu limestone, the same reservoir as Oyong. Santos calls it encouraging but says appraisal is needed. Wortel-2 is planned for October.

well test result

Wortel-1 (Santos 40.5% operator) found a 141 m gross gas column and flowed 18.5 mmcf/d, in the same limestone as Oyong 7 km away. Santos says appraisal is needed to confirm the resource. Wortel-2 is planned for October 2006.

well test result

Third-party filing by Cue: Wortel-1 reached 1,464 m with an initial gross gas column of 141 m above a gas-water contact at 1,383 m. A liner and flow test follow. It is a gas find 7 km west of Oyong, with significance awaiting testing.

drilling result

Santos reported a record first half: profit A$370m (up 28%), underlying profit A$407m, production 28.7 mmboe, interim dividend 20c. Full-year guidance stays 60-61 mmboe. It says PNG pipeline capital costs have risen, so the PNG project needs higher gas prices.

half year report

Galloway-1 (Santos 37.5% operator) reached 2,315 m and found both objectives water-bearing, with no hydrocarbons. It will be plugged and abandoned. This is a dry hole against the 28 mmbbl mean prospect; the rig moves to Glenaire-1 in the Otway Basin.

drilling result

Gnu-1 delineation well on Reindeer/Caribou (WA-209P, Santos 45%, Apache operator) tested 26.3 mmcf/d of gas and 61 bbl/d condensate. It logged 378 ft of net pay in the Legendre, 78 ft new. Santos calls it a significant addition to its WA gas resources.

well test result

Santos disclosed that Westpac entities received an unsolicited third-party offer for Delhi. Westpac's WRIPL said in a 25 July letter it believes the offer is worth more than $83.25 per FIELDS and will start talks. This puts Santos's agreed deal at risk.

business combination

Evans Shoal South-1 reached 4,097 m and encountered hydrocarbons in both objectives, but none reached surface. It was plugged and abandoned short of target depth because of poor hole conditions. Santos holds 40%. The rig moves to Barossa-1, then Caldita-2.

drilling result

Santos agreed a $474m acquisition of Delhi Petroleum, with FIELDS holders offered $83.25 cash each via a creditors' scheme. It lifts Santos's Cooper Basin stake from about 63% to 85% and adds about 67 mmboe of 2P reserves. Debt-funded; close expected early Q4.

business combination

Santos downgraded Jeruk: the oil column is now about 145 m rather than 379 m, with an oil-water contact near 4,760 m. The most likely contingent resource falls below the 170 mmbbl estimate of January 2005. Further appraisal is needed.

resource reserve update

Santos announced an oil and gas discovery at Dua-4X in Vietnam Block 12E, where it takes 37.5% via farm-in. Wireline tests recovered oil, with no flow test. A further sidetrack follows, then the Blackbird well.

drilling result

Santos disclosed a 29 May well control incident at Banjar Panji-1 in Java, where it holds 18% (non-operated). Mud and water flowing from vents has affected nearby villages. Cause is under investigation; Santos says it has insurance but gives no cost figure.

regulatory community update

Third-party filing by Cue: Herbras-1 is being plugged and abandoned at 2,515 m after finding no significant hydrocarbons in its primary objective. A dry hole in the Sampang PSC (Santos 40.5% operator), following Dukuh-1 in May.

drilling result

Third-party filing by Tap Oil: Amulet lower pool estimated at ~24 mmbbl oil in place, 10-15 mmbbl recoverable, with a second pool found. Commercial development 'appears achievable'. If developed, Santos (37.3684%) must repay 15 times Amulet-1's cost from first oil revenue.

resource reserve update

Jeruk-3 (Sampang PSC, Santos 40.5% operator) was retested after an earlier test was cut short. A 48-hour test stabilised at about 2,750 barrels a day, below the earlier 3,200 figure, and was limited by surface facilities. Drilling ahead to find the oil/water contact.

flow test result

Third-party filing by Tap Oil: Amulet-1 (WA-8-L) is a new oil discovery with a net oil column of about 20 m, but below pre-drill expectations and commerciality is unproven. Santos (37.3684%) has now elected to join the ongoing evaluation, with a JOA cost-recovery penalty if it develops.

drilling result

Jeruk-3 appraisal well in Indonesia's Sampang PSC (Santos 40.5% operator) flowed oil at about 3,200 barrels a day, limited by surface facilities. This is a positive early appraisal result for the Jeruk discovery; testing continues, then drilling ahead.

flow test result

Third-party filing by Cue: Dukuh-1 in the Sampang PSC (Santos 40.5% operator) found no significant hydrocarbons and is being plugged and abandoned. The rig moves to Herbras-1. This is a dry hole for the 2006 Indonesian program.

drilling result

Third-party filing by Sunshine Gas: it signed a binding agreement to sell its roughly 15% Roma Shelf interest to Santos for A$10m cash, subject to Sunshine shareholder approval. If completed, Santos would hold the whole Roma Shelf (PL 5) rather than about 85%.

asset acquisition disposition

Santos bought Woodside's 30% of VIC/RL2, lifting its Kipper gas field interest in Bass Strait from 14% to 35%, subject to government approvals. Gross resource is about 620 Bcf of gas plus 30 million barrels of liquids; first gas is expected 2009, subject to funding and approvals.

asset acquisition disposition

Santos entered Vietnam for the first time, farming into Premier Oil-operated Blocks 12E and 12W in the Nam Con Son Basin for a 37.5% interest, up from nil. It funds part of a two-well program; Dua-4X is to start drilling in early May 2006, followed by the Blackbird well.

farm in farm out agreement

Third-party filing by Magellan: Santos and Magellan, as Mereenie producers, signed a heads of agreement to sell more gas to the Northern Territory's Power and Water Corporation. It covers a minimum 5.2 PJ from March 2006 to December 2008. Terms are not binding until a full agreement is signed.

material agreement

Third-party filing by Icon Energy: Santos will earn 50% of Surat Basin permit ATP 626P by drilling Stitch No.1 and operating. It will also subscribe for 10 million Icon shares at 6.76c ($676,000). Santos gets a heads of agreement to operate two Cooper-Eromanga permits at 63%.

farm in farm out agreement

Santos extended Managing Director John Ellice-Flint's contract, covering January 2006 to at least August 2009. Base salary is $1.5m, with up to 150% short-term bonus and 2.5m options at $11.36 subject to AGM approval. A $500,000 annual interest-free share loan replaces future superannuation benefits.

director officer appointment

Third-party filing by Nexus: Santos will earn 37.5% of Gippsland permit VIC/P39(V) and become operator, subject to approvals, by funding part of the Galloway-1 well. The well is planned for Q3 2006, with a mean 28 million barrel target.

farm in farm out agreement

Santos booked a record 122 mmboe of 1P additions in 2005, lifting 1P reserves to 414 mmboe after 56 mmboe of production. 2P reserves rose to 774 mmboe, including 49.6 mmboe 1P from Fairview. Contingent resources rose 37% to 1,971 mmboe.

resource reserve update

Santos reported 2005 revenue up 64.1% to $2,462.8m and underlying profit up 107% to $638.7m. Net profit rose 114.8% to $762.1m. The final dividend is 20 cents per share, with record date 6 March 2006.

annual report

First gas flowed from the Santos-operated Casino field offshore Victoria (Santos 50%), ahead of schedule, a little over three years after discovery. Full production is due later in February under a 12-year contract of up to 420 PJ to TRUenergy.

production update

Santos reports record 2005 sales revenue of $2.46 billion, up 64%, on production up 19% to 56.0 mmboe. It targets 60-61 mmboe in 2006. Oyong first oil is delayed to late first half 2006, with project cost up about 30% to US$130m.

quarterly activities report

Santos announced a 25-well, $225m exploration program for 2006, up from $187m spent in 2005. Seventeen wells are outside Australia, including Egypt and the Gulf of Mexico. Lynedoch and Evans Shoal South come later in the year.

drilling scheduled

Nyari 1, an exploration well offshore East Java (Santos 67.5%, operator), reached 3693 m. The Kujung Formation target was water bearing, with no hydrocarbons. The well will be plugged, and the rig moves to Jeruk 3.

drilling result