SANTOS LIMITED — M&A Activity 2007

ASX ANNOUNCEMENT

30 January 2007

QGC receives conditional proposal from Santos

Following an unsolicited approach from Santos, Queensland Gas Company (QGC) received a conditional and incomplete proposal from Santos for the acquisition of all shares in OGC.

A number of conditions would need to be satisfied and the proposal's terms would need to be in a form acceptable to QGC and fully documented before the Santos proposal could be capable of being compared with the AGL transaction.

However elements of the Santos proposal appear to be attractive to QGC and its advisers are currently considering the proposal.

The QGC Board of Directors will provide further advice to shareholders when there are material developments.

Santos' has stated that its earlier offer of $1.26 cash per share for all QGC shares will be allowed to lapse next week.

AGL Proposal

QGC has today released to the ASX its Explanatory Memorandum in relation to the AGL Proposal announced on 5 December 2006. The Explanatory Memorandum will be dispatched to shareholders tomorrow.

The QGC Board continues to recommend the AGL Proposal, subject to no superior offer emerging.

$Fnds -$ Media contact: Cannings Martin Debelle 0409 911 189/ 02) 9252 0622 Sarah Hudson 0424 034 059/02) 8282 9908

For further information contact: Mr Richard Cottee Managing Director Queensland Gas Company Limited (07) 3004 1000 Telephone: Facsimile: (07) 3012 8411 Website: www.ggc.com.au