27 April 2005

Strong opening quarter for Santos

Santos Limited today reported higher production, sales volumes and revenue for the opening quarter of 2005, reflecting improved results across most areas and recovery from the Moomba incident which occurred on 1 January 2004.

Total production for the three months ended 31 March 2005 was 12.5 million barrels of oil equivalent (mmboe) compared with 9.7 mmboe in the previous corresponding period.

Sales volumes were also up from 10.0 mmboe to 13.6 mmboe while total sales revenue increased to $465.9 million from $256.4 million in the first quarter of 2004.

"These March quarter results are very pleasing, reflecting strong production across most areas and the benefits of increased interests acquired last year and early this year in Indonesia, the Cooper Basin and offshore Victoria," Santos' Managing Director Mr John Ellice-Flint, said today.

"The good performance also reflects the recovery from the Moomba plant incident which occurred during the comparable quarter last year. The first payment from the insurance was received during April 2005, with further payments anticipated to be received by year end.

"The Company continued to grow production with the start up of the Mutineer-Exeter fields in late March, which had minimal impact during the first quarter but will make a major contribution to the remainder of the year, and commencement of production from the Minerva field in the offshore Otway." he said.

During mid March, the last remaining production well on the East Spar field ceased production. The likelihood of this occurring had been advised last year and the actual timing of the cessation of production is close to that previously indicated.

The John Brookes field is due on stream in August 2005 and will meet existing contractual requirements for East Spar gas supplies, together with new contracts previously announced. In the interim, arrangements are in place to purchase gas from third parties to meet these requirements.

Santos Ltd ABN 80 007 550 923

Shortly after the end of the March quarter, significant progress was announced on further growth projects, including the award of a production licence and completion of the onshore pipeline installation at the Casino gas field in the Otway Basin, and the development of the Oyong oil and gas field offshore Fast Java

During the quarter. Santos also announced an agreement with OMV Petroleum Pty Ltd to acquire the Cooper Basin and Gippsland assets of Basin Oil Pty Ltd effective 1 January 2005.

Exploration activity during the first quarter was also pleasing with discoveries at Hurricane 1 offshore Western Australia and Hiu Aman 1 in deep water offshore Kalimantan. Both of these discoveries are expected to be appraised during 2005.

FOR FURTHER INFORMATION PLEASE CONTACT:

Media enquiries: Martyn Eames Santos Limited (08) 8218 5225 / 0439 828 129 Investor enquiries: Andrew Seaton Santos Limited (08) 8218 5157 / 0410 431 004

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

STOCK EXCHANGE ACTIVITIES REPORT FOR OUARTER ENDING 31 MARCH 2005.

(Unless otherwise indicated, all comparisons are made against the 2004 first quarter)

$\mathbf{1}$ SALES AND PRODUCTION

Summarv

Total production for the first quarter of 2005 was 12.5 million barrels of oil equivalent (mmboe), an increase of 29% over the previous corresponding period.

The increased production reflects the reinstatement of production from the Moomba plant together with increased interests in the Gippsland Basin. Production outside of the Cooper Basin was steady as lower gas production at East Spar and lower oil production at Legendre was offset by higher production from the US and the inclusion of a full quarter of Bayu-Undan liquids production.

Total sales revenue for the first quarter was $465.9 million, an increase of 82% over the previous corresponding quarter. The improvement in sales revenue reflects both increased sales volumes and improved prices for most products.

Production by Product

Sales Gas and Ethane

Sales gas and ethane production increased by 25% to 49.7 petajoules (PJ) from 39.7 PJ. Sales volumes increased by 31% to 53.9 PJ and sales revenue was up by 43% from $130.0 million to $185.6 million.

Crude Oil

Oil production during the March quarter was 2.14 million barrels, which was 10% lower than the fourth quarter of 2004. This was largely due to lower Carnarvon Basin output, offset by higher Cooper Basin performance.

Oil sales volumes were 8% lower than in the fourth quarter of 2004 due to the timing of liftings and lower production. Sales revenue from oil decreased by 4%, from $144.6 million in the fourth quarter of 2004 to $139.1 million in the first quarter of 2005. The average realised oil price for the first quarter of 2005 was A$59.70 (US$43.97) per barrel after hedging, 5% higher than the 2004 fourth quarter of A$56.77 (US$39.60).

Condensate

Condensate production was 170% or 0.8 million barrels higher than the 2004 first quarter mainly due to a full quarter of Bayu-Undan liquids production plus higher condensate production from the US.

Condensate sales volumes increased by 390% from 0.5 million barrels in the first quarter 2004 to 2.3 million barrels in the first quarter 2005 due to the increased production and timing of liftings.

In line with the increased production and sales, revenue was over 300% higher at $88.2 million although this reflects a 16% fall in the realised condensate price to A$37.79 from A$45.19 per barrel.

IPG

LPG production in the first quarter of 2004 had been almost curtailed due to the impact of the Moomba incident and rose from 4,700 tonnes to 78,600 tonnes in the first quarter 2005 due to the recovery of the Moomba plant and the impact of Bayu-Undan liquids production. Sales volumes were up from 15,400 tonnes to 77,100 tonnes and sales revenue increased markedly from $7.1 million to $53.0 million.

Production by Area Cooper Basin

Sales gas and ethane production rose to 32.1 PJ from 23.8 PJ reflecting the recovery from the impact of the Moomba incident offset by field decline.

Crude oil production was up by 9% or 0.06 million barrels from the December 2004 quarter, reflecting the larger delineation and development program commenced during 2004.

Condensate production of 0.49 million barrels was 203% higher than the 0.16 million barrels produced during the March quarter 2004 due to the recovery of the Liquids Recovery Plant following the Moomba incident.

LPG production was more than 1000% higher at 54,800 tonnes compared with the 4,700 tonnes produced during the March 2004 quarter when the Liquids Recovery Plant was down.

Surat Basin/Denison Trough

Sales gas production rose to 4.3 PJ from 3.6 PJ due to increased production at Churchie, which did not produce during the March quarter 2004, and Scotia. where additional wells were completed during the last quarter of 2004.

Amadeus Basin

Sales gas and ethane production rose marginally to 3.2 PJ from 2.8 PJ due to higher customer demand.

Crude oil production was higher by 7% to 0.07 million barrels from the December 2004 quarter of 0.06 million barrels due to optimisation of gathering system line pressures.

Otway Basin

Sales gas production fell to 0.9 PJ from 1.4 PJ due to by the disposal of onshore Otway assets offset by commencement of production from the offshore Minerva field.

Gippsland Basin

Sales gas production increased to 2.6 PJ from 0.7 PJ due to the impact from 1 February 2005 of increased interests acquired from OMV Petroleum Pty Ltd and the successful remedial activity to abandon Baleen 3 and complete the Baleen 4 horizontal production well.

Carnaryon Basin

Sales gas production in the March quarter 2005 declined to 1.7 PJ from 5.1 PJ in the March quarter 2004 due to continuing field decline at East Spar. Late in the quarter all production ceased from East Spar. Whilst further production is currently considered unlikely, options are being evaluated for the potential to return existing wells to production or to complete and connect the successful East Spar 9 appraisal well drilled to the north of the field in late 2004.

Crude oil production was down by 17% or 0.25 million barrels from the December 2004 quarter, reflecting natural decline at the Legendre and Stag oil fields

Stag production in the March 2005 quarter was down by 6% or 0.03 million barrels from the December 2004 quarter, reflecting the continuing benefits of the infill drilling campaign carried out in late 2004. Evaluation continues to progress options to drill and complete additional wells for water injection during the second half of 2005. Further infill drilling will also be evaluated for the second half of 2005. Should this program proceed, it is hoped that the addition of optimised water injection could assist with the continued improvement in production performance.

Legendre was down by 40% from 0.51 million barrels to 0.31 million barrels as the Legendre North 5 well drilled during 2004 showed increasing water cut, as expected. An additional appraisal/development well is being reviewed for likely drilling during the second half to help offset this decline.

Condensate production in the March quarter 2005 was down 72% to 0.07 million barrels from 0.24 million barrels in the March quarter 2004, reflecting the declining performance at East Spar.

Bonaparte Basin

Condensate production at Bayu-Undan was substantially higher at 0.59 million barrels in the March guarter 2005 compared with 0.04 million barrels in the March quarter 2004 due to the field having reached the increased design capacity for raw gas production of 1.1 Billion Cubic Feet (BCF) per day.

LPG production from Bayu-Undan reached 23,800 tonnes in the March quarter 2005 versus minimal production during the March quarter 2004.

United States

Sales gas production rose to 3.5 PJ in the March 2005 quarter from 2.3 PJ in the March 2004 quarter reflecting increased production in the Mountainside (Petru) and Hordes Creek (Hamman and Anderson) projects where additional wells were drilled and completed, as well as better than anticipated performance from the recompletion of the St. Joe well in the Lafite Allen Dome project.

Condensate production in the March 2005 quarter was up to 0.08 million barrels from 0.01 million barrels in the March 2004 quarter due to reallocation of crude to condensate production and improved condensate vields from the better field performance at Petru and St. Joe.

Indonesia and PNG

Sales gas production from Brantas and Kakap was 1.4 PJ in the March quarter 2005 following the acquisition of these assets during the second half of 2004.

Crude oil production from Kakap for the March 2005 quarter was 0.04 million barrels, down from 0.07 million barrels in the December quarter 2004. This was largely as a result of the accounting for production for the December 2004 quarter covering a four month period due to the timing of the acquisition and receipt of data. Production from SE Gobe was unchanged at 0.06 million barrels in the March quarter 2005 compared with the December quarter 2004.

$21$ EXPLORATION

Expenditure on exploration was $41.9 million in the first quarter of 2005. Santos spudded six wildcat wells during the quarter, with two of those continuing operations into the second quarter. In addition, the drilling of one well spudded in the third quarter of 2004 was completed while another well spudded in the fourth quarter of 2004 continues operations beyond the first quarter of 2005. Two of the six wells spudded in 2005 encountered hydrocarbons.

First Quarter Exploration Activity

During the first quarter, the Jeruk 2 well offshore Indonesia was further evaluated by drill stem testing which confirmed a gross hydrocarbon column of more than 379 metres after recovering 33 degree API oil during the clean-up flow of a test over the interval 5430 to 5460 metres measured depth. Due to plugging of the test tools, it became impractical to continue testing operations and the well was suspended for future potential re-entry.

The Hurricane 1 well located in WA 208 P offshore Western Australia encountered a 76 metre gross gas column with no gas water or gas oil contact and was plugged and abandoned. Analysis of the samples recovered during logging supports the potential for a downdip oil leg. It is planned to evaluate this potential with an appraisal well in 2005, subject to rig availability.

The Hiu Aman 1 well in the deep water Kutei Basin off Kalimantan Indonesia discovered approximately 35 metres of mainly gas and some oil. This discovery is only 65 kilometres from the Bontang LNG facility and has proven the existence of an extension of the productive hydrocarbon province to the south-west into this attractive trend. The Hiu Aman discovery is planned to be evaluated as soon as possible during 2005, subject to rig availability.

Shortly after the end of the quarter, the Cougar B well in the shallow waters offshore Gulf of Mexico was plugged and abandoned.

During the March quarter, Santos acquired exploration and delineation 3D onshore seismic consisting of 640 square kilometres in south-west Queensland

In Indonesia, a total of 1614 square kilometres of 3D exploration and delineation offshore seismic was acquired in the Sampang and Madura PSCs including the Jeruk, Oyong and Maleo structures.

Seismic Acquired

Forward Exploration Drilling Schedule

The current indicative drilling schedule for the remainder of 2005 is set out below:

*- Attempting to sell down interest prior to drilling.

The exploration portfolio is constantly being optimised therefore the above program may vary as a result of rig availability, drilling outcomes and as new prospects mature.

$31$ DELINEATION AND DEVELOPMENT

Delineation and development expenditure was $176.4 million in the first quarter of 2005.

Delineation Activity

Offshore Western Australia, three wells were drilled in the Carnaryon Basin including the Mutineer 10 appraisal well (WA 26L, Santos 33.4% Operated interest) that was spudded in December 2004 and plugged and abandoned with around 9 metres of net pay in January 2005. The Plymouth 1 Near Field Exploration (NFE) well (WA 27L, Santos 33.4% Operated interest) was plugged and abandoned during the quarter after failing to intersect commercial hydrocarbons. The Corowa East 1 appraisal well (WA 264P, Santos 50% Operated interest) was also plugged and abandoned during the quarter after failing to intersect commercial hydrocarbons.

In the Timor Sea offshore Northern Territory, the Coot 1 NFE (AC/L2, Santos 10.3% interest) was plugged and abandoned after intersecting the primary objective low to prognosis and water saturated.

In the Cooper Basin, two oil wells were spudded during the quarter. The Mulberry 2 oil appraisal (ATP 299P, Santos 89% Operated interest) was cased for production during the quarter while the Mulberry 3 appraisal was spudded during the quarter and cased for production shortly after the end of the quarter. During the second quarter 2005, three rigs will be drilling nineteen oil NFE, appraisal and development wells in SWQ and SA to continue the increased oil delineation and development program commenced in 2004.

In the US, three delineation wells were spudded during the quarter with the Scheunemann 1 gas delineation well (Dewitt County, Santos 65% interest) plugged and abandoned after failing to intersect commercial hydrocarbons. The Hardy GU 1 gas delineation well (Matagorda County, Santos 45% interest) was spudded during the quarter and intersected gas pay in the primary objective but was not cased until soon after the end of the quarter due to a sidetrack being required to run casing. The Von Gonten 1 gas delineation well (Karnes County, Santos 40% interest) had not reached the primary objective and was still drilling at the end of the quarter.

Two delineation wells were spudded in the East Java Basin onshore Indonesia (Brantas PSC, Santos 18% interest) with the Carat 2 gas well being cased for further testing after intersecting gas pay in a secondary objective. Also in the Brantas PSC, the Tanggulangin 4 appraisal well was spudded during the quarter and was still drilling at the end of the quarter having not yet intersected the primary objective.

Development Activity

The Mutineer-Exeter field development (WA26L and WA27L, Santos 33.4% Operated interest) commenced production in late March approximately three months early and 10% under budget. Shortly after the end of the quarter, the field was producing at around 100,000 barrels of oil per day. Additional appraisal and development drilling on the Mutineer and Exeter fields is being planned for the second and third quarter of 2005.

In the Timor Sea, work continued on the Bayu-Undan LNG project (Santos interest 10.6%). At the end of the quarter, the LNG project was over 67% complete and on schedule for first LNG during early 2006, with the tie in of the pipeline to the offshore facilities expected to occur during a planned regulatory shutdown in May. Drilling of the remaining development wells has been completed with the rig demobilised shortly after the end of the quarter. Debottlenecking of the liquids recycle project during the last half of 2004 resulted in steady increased throughput for most of the first quarter of 2005 at 1.1 BCF per day of raw gas against the initial design of 900 million cubic feet per day.

The John Brookes development was almost 80% complete at the end of the first quarter with first gas production expected in August 2005. The drilling of up to three development wells is planned to commence in May from the platform which was installed during late April. Additional appraisal is likely in 2005 with further scope for incremental reserves.

In the Cooper Basin, nineteen gas development wells were spudded during the quarter and one well spudded during the previous quarter was cased for future production during the first quarter. Four of the nineteen wells spudded during the quarter were still drilling at the end of the first quarter. Thirteen of the fifteen wells finished during the quarter were cased and suspended as future gas producers while one was suspended for further testing and one was plugged and abandoned with insufficient reservoir to warrant completion. A further nine gas projects were connected for production during the quarter. One successful oil development well was drilled at Jackson 44 (ATP 259P. Santos 55.5% Operated interest). During the quarter, one oil well was brought on-line.

In the US, two Petru development wells were completed in the Mountainside Field during the first quarter (Willacy County, Santos 34.4%) and came online at a combined gross rate of 28 mmscfd and 1840 bcpd.

In the Otway Basin, the Minerva field commenced production at the end of 2004 allowing Santos to market its 10% share of the 130 to 150 terajoules per day production directly to the Victorian spot market and industrial customers through a wholly-owned subsidiary, Santos Direct Pty Ltd.

The Casino development achieved several important milestones with the completion of the onshore pipeline, commencement of the directionally drilled shore crossing and receipt of the formal production licence. At the end of the quarter, the project was almost 40% complete and on track for a first quarter 2006 start up of production. Development drilling is planned to commence around the end of April using the Ocean Patriot semi-submersible drilling rig.

In East Java both the Oyong oil and gas and Maleo gas projects received formal approval of their respective development plans by the Indonesian government. This allowed the formal sanction of the Oyong development by a phased development to bring oil onto production at about 20,000 barrels per day through 6 horizontal development wells during the last quarter of 2005. The gas will be developed in a second development phase, subject to the buver effecting satisfactory credit arrangements.

The Maleo gas field development is awaiting imminent formal sanction upon signature of the final Gas Sales Agreement and is on track for start-up of production in early 2006. A four-well development program is planned for the Wunut field in the Brantas PSC, commencing during the second or third quarter.

4. BUSINESS DEVELOPMENT

Acquisitions/Divestments

During the quarter Santos entered into an agreement to acquire Basin Oil Pty Ltd which holds all of OMV Petroleum Pty Ltd's Cooper Basin and Gippsland Basin assets in a deal signed 17 February that is effective 1 January 2005. These interests are accounted from 1 February 2005. The transaction is expected to be completed during the second quarter of 2005.

The interests acquired include 2.1% of the SA Cooper Basin, 40% of VIC/L21 containing the Patricia-Baleen gas field and its associated onshore processing facility at Orbost, 40% of VIC/RL3 containing the Sole gas field, 33% of VIC/RL1 containing the Golden Beach gas field and 33% of the VIC/P55 exploration block.

5. HEDGING

The table below details the hedge position as at 31 March 2005.

All currency hedging of anticipated future USD sales was closed out as at 31 December 2004. The realised gain of A$38 million will be allocated to USD sales expected to be received over the course of 2005 in accordance with the original hedge designations.

* Includes construction and fixed assets expenditure

ABBREVIATIONS

CONVERSIONS

Sales Gas & Ethane, 1 PJ: Crude Oil, 1 barrel: Condensate (Naphtha), 1 barrel: LPG, 1 tonne:

• $= 171.937$ boe x 103
• $= 1$ boe
• $= 0.935$ boe
• $= 8.458$ boe