Form 605 Corporations Act 2001Section 671B

Notice of ceasing to be a substantial holder

2. Changes in relevant interests

Particulars of each change in, or change in the nature of, a relevant interest (2) of the substantial holder or an associate (3) in voting securities of the company or scheme, since the substantial holder was last required to give a substantial holding notice to the company or scheme are as follows:

3. Changes in association

The persons who have become associates (3) of, ceased to be associates of, or have changed the nature of their association (7) with, the substantial holder in relation to voting interests in the company or scheme are as follows:

4. Addresses

The addresses of persons named in this form are as follows:

Annexure "A"

Annexure A Page 1 of 1

This is Annexure "A" of 1 pages referred to in the Form 605 (Notice of ceasing to be a substantial holder), signed by me and dated 24 July 2012.

Name: David Thuan Jin Lim, Company Secretary Santos Limited

Santos Group Entities

Alliance Petroleum Australia Pty Ltd Barracuda Limited Basin Oil Pty Ltd Betel Gas Pty Ltd Bonaparte Gas & Oil Pty. Limited Bridge Oil Developments Pty Ltd Bridge Oil Exploration Pty Limited Bridgefield Pty. Ltd. Bronco Energy Pty Limited Canso Resources Pty Ltd CJSC South Petroleum Company Coveyork Pty. Limited Doce Pty. Ltd. Eastern Energy Australia Pty Limited Eastern Star Gas Holdings Pty. Ltd. Eastern Star Gas Limited Eastern Star Gas LNG Pty. Ltd. Eastern Star Gas Pipeline Ptv. Ltd. Eastern Star Gas Sales Pty. Ltd. Eastern Star Operations Pty Ltd Fairview Pipeline Pty Ltd Farmout Drillers Pty Ltd Gidgealpa Oil Pty Ltd Hillgrove Energy Pty Ltd Kipper GS Pty Ltd Lavana Limited Moonie Oil Pty Ltd Moonie Pipeline Company Pty Ltd Narrabri Energy Pty Ltd Narrabri Power Pty Ltd Petromin Pty Ltd Reef Oil Pty Ltd Sanro Insurance Pte Ltd Santos (299) Pty Ltd (in liquidation) Santos Americas and Europe Corporation Santos Asia Pacific Pty Ltd Santos Australian Hydrocarbons Pty Ltd Santos Bangladesh Limited Santos (BBF) Pty Ltd

Santos Baturaia Pty Ltd Santos Belida Pty Ltd Santos (BOL) Pty Ltd Santos Carbon Pty Ltd Santos CSG Pty Ltd Santos Darwin LNG Pty Ltd Santos Direct Pty Ltd Santos (Donggala) Pty Ltd Santos Egypt Pty Ltd Santos EOM Pty Ltd Santos Exploration Pty. Ltd. Santos Facilities Pty Ltd Santos Finance Ltd Santos GLNG Corp Santos GLNG Pty Ltd Santos (Globe) Pty Ltd Santos Gnuco Pty Ltd Santos Hides Ltd Santos International Pte Ltd Santos International Holdings Pty Ltd Santos International Operations Pty Ltd Santos International Ventures Pty Ltd Santos (JBJ1) Pty Ltd Santos (JBJ2) Pty Ltd Santos (JPDA 06-104) Pty Ltd Santos (JPDA 91-12) Pty Ltd Santos (Madura Offshore) Pty Ltd Santos Netherlands B.V. Santos Niugini Exploration Limited Santos (N.T.) Pty Ltd Santos (NARNL Cooper) Pty Ltd Santos Offshore Pty Ltd Santos OIG Pty Ltd Santos (Papalang) Pty Ltd Santos Petroleum Management Pty Ltd Santos Petroleum Operations Pty Ltd Santos Petroleum Pty Ltd Santos Petroleum Ventures B.V. Santos (Popodi) Pty Ltd

Santos QLD Upstream Developments Pty Ltd Santos QNT Pty. Ltd. Santos QNT (No. 1) Pty. Ltd. Santos QNT (No. 2) Pty. Ltd. Santos Queensland Corp Santos Resources Pty Ltd Santos (Sampang) Pty Ltd Santos Sangu Field Limited Santos (SPV) Pty Ltd Santos (TGR) Pty Ltd Santos Timor Sea Pipeline Pty Ltd Santos TOG Corp Santos TOGA Pty Ltd Santos TPC Pty Ltd Santos TPY Corp Santos TPY CSG Corp Santos Upstream Pty Ltd Santos Vietnam Pty Ltd Santos (Warim) Pty Ltd Santos Wilga Park Pty Ltd SB Jethro Pty Ltd Sesap Pty Ltd Shaw River Power Station Pty Ltd Sulu Resources Pty. Limited TMOC Exploration Proprietary Limited Tooncomet Pty. Limited Vamgas Pty Ltd Zhibek Resources Limited

Annexure B Page 1 of 10

Annexure "B"

This is Annexure "B" of 10 pages referred to in the Form 605 (Notice of ceasing to be a substantial holder), signed by me and dated 24 July 2012,

Name: David Thuan Jin Lim, Company SecretarySantos Limited

$20^{44}$ THIS AGREEMENT is made on day of July 2012

PARTIES

EASTERN STAR GAS LIMITED ABN 29 094 269 780 of Ground Floor, Santos Centre, 60 Flinders Street, Adelaide SA 5000 (the Vendor)

BLACK CYGNET PTY. LTD. ACN 159 381 638 of Unit 3, 131-133 Brook Street, Coogee NSW 2034 (the Purchaser)

RECITALS

• The Vendor is the registered holder and beneficial owner of the PRL Shares. $\Lambda$ .
• The Vendor has agreed to sell, and the Purchaser has agreed to purchase, the PRL Shares B. on the terms and conditions set out in this document.

OPERATIVE PART

1. DEFINITIONS

1.1 Definitions

In this document, unless something else is clearly indicated:

Authorisation means any consent, registration, agreement, certificate, licence, approval, permit, authority or exemption from, by or with a Government Agency;

Business Day means a day that is not a Saturday, Sunday or a public holiday in South Australia or New South Wales:

Company means Petrel Energy Limited ABN 82 125 394 667;

Completion means completion of the sale and purchase of the PRL Shares pursuant to this document;

Completion Date means the date that this document is executed by all parties or such other date agreed by the Vendor and the Purchaser;

Corporations Act means the Corporations Act 2001 (Cth);

Dollars, A$ and $ means the lawful currency of the Commonwealth of Australia;

Duty means any stamp, documentary, transaction or registration duty or similar charge and includes any interest, fine, penalty, charge or other amount imposed in respect of the above;

Government Agency means any government or governmental, semi governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity;

GST has the meaning it does in section 195-1 of the GST Act;

GST Act means A New Tax System (Goods and Services Tax) Act 1999 and any related or similar legislation;

PRL Shares means 24,750,000 fully paid issued ordinary shares in the capital of the Company;

Purchase Price means the price payable for the PRL Shares set out in clause 3;

Purchaser's Nominee Company means Chalsmbury Nominees Pty Ltd ABN 69 131 914 666 of Level 4, 60 Collins Street, Melbourne VIC 3000 being the nominee appointed by the Purchaser to hold the PRL Shares upon Completion on behalf of and for the benefit of the Purchaser;

Security Interest means an interest or power:

• reserved in or over an interest in any asset including, but not limited to, any $(a)$ retention of title; or
• created or otherwise arising in or over any interest in any asset under a bill of sale, $(b)$ mortgage, charge, lien, pledge, trust or power,

by way of security for the payment of a debt or any other monetary obligation or the performance of any other obligation, including any agreement to grant or create any of the above;

Supply has the same meaning it does in section 9-10 of the GST Act; and

Warranties means the warranties given by the Vendor to the Purchaser under this document set out in clause 5.

$1.2$ Manner of Payment

All moneys payable under this document must be paid by cash, bank cheque or telegraphic transfer or such other form agreed by the Vendor and the Purchaser.

$2.$ SALE AND PURCHASE

The Vendor must sell, and the Purchaser must purchase, the PRL Shares free from all Security Interests on the terms and conditions set out in this document.

$\mathbf{3}$ . PURCHASE PRICE

The price payable for the PRL Shares is $1,237,500 (One million, two hundred and thirty seven thousand, five hundred Australian Dollars).

$4.$ COMPLETION

$4.1$ Date, place and time for Completion

Completion will take place at the time of execution of this document on the Completion Date at the offices of Santos Limited, Level 7, 51 Pitt St, Sydney NSW 2000

$4.2$ Delivery of documents

• At Completion, the Vendor must deliver or cause to be delivered to the $(a)$ Purchaser a completed transfer form of the PRL Shares to the Purchaser, duly executed by or on behalf of the Vendor as transferor in favour of the Purchaser's Nominee Company as transferee.
• $(b)$ The transfer of the PRL Shares to the Purchaser's Nominee Company does not relieve the Purchaser of its obligations under this document.

$4.3$ Purchaser's obligations at Completion

At Completion, the Purchaser must pay to the Vendor the Purchase Price in immediately available funds by telegraphic or other electronic means of transfer of cleared funds into a bank account nominated by the Vendor.

$4.4$ Conditions of Completion

• Completion is conditional on both the Vendor and the Purchaser complying with $(a)$ all of their obligations under this clause 4.
• If either the Vendor or the Purchaser fails to fully comply with its obligations $(b)$ under this clause 4 and the parties do not complete this document, each party must:
  • $(i)$ return to the other all documents delivered to it under this clause 4;
  • $(ii)$ repay to the other all payments received by it under this clause 4; and
  • $(iii)$ do everything reasonably required by the other party to reverse any action taken under this clause 4,

without prejudice to any other rights any party may have in respect of that failure.

$4.5$ Title and Risk

Legal title to, and risk in, the PRL Shares passes to the Purchaser's Nominee Company and the Purchaser respectively on Completion.

WARRANTIES 5.

$5.1$ Authority Warranties

Each party gives to each other party the following Warranties as at the date of this document:

• $(a)$ if the party is a body corporate:
  • $(i)$ it is a corporation incorporated and validly existing under the laws of Australia;
  • it has taken all necessary action to authorise the execution, delivery and $(ii)$ performance of this document in accordance with its terms;
  • execution, delivery and performance by it of this document complies with $(iii)$ its constitution;
• the party has all requisite power and authority to enter into, and perform its $(b)$ obligations under, this document and can do so without the consent of any other person and will not be in breach of any other agreements or obligations by doing so:
• the execution, delivery and performance by the party of this document complies $(c)$ with:
  • each applicable law, regulation, Authorisation, ruling, judgement, order or $(i)$ decree of any government agency; and
  • $(ii)$ any document which is binding on it;
• this document constitutes a legal, valid and binding obligation of the party $(d)$ enforceable against it in accordance with its terms, subject to the effect of any applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors' rights generally;
• no application has been made to a court for an order that the party be declared $(e)$ banktupt and, as far as it is aware, there are no circumstances justifying such an order; and
• $(f)$ the party is not entering into this document as trustee of any trust or settlement.

$5.2$ Vendor Warranties

The Vendor gives the following Warranties in favour of the Purchaser as at the date of this document:

the Vendor is the beneficial owner of the PRL Shares, which are free of all $(a)$ Security Interests;

• $(b)$ the Vendor is able to sell and transfer full legal and beneficial title to the PRL Shares without the consent of any other person and free of any pre emptive rights or rights of first refusal; and
• $(c)$ the PRL Shares are fully paid and no money is owing in respect of them.

5.3 Independent Warranties

Each Warranty is to be construed independently and is not limited by reference to or inference from any other Warranty.

5.4 Acknowledgments

The parties acknowledge and warrant that:

• $(a)$ they accept that they rely on only those matters expressly set out in this document;
• $(b)$ any statement, representation, warranty, undertaking or other provision not expressly set out in this document has not been relied upon and shall have no force or effect; and
• $(c)$ the Purchaser has had the opportunity to make, and has made, reasonable inquires in relation to the PRL Shares and the Company and has satisfied itself in relation to the matters arising from those inquiries.

5.5 Reduction in Purchase Price

If a payment is made for a breach of any Warranty given by the Vendor to the Purchaser, the payment is to be treated as a reduction in the Purchase Price.

GENERAL 6.

$6.1$ Further Action

Each party must do or cause to be done all acts and things necessary or desirable to give effect to this document and refrain from doing all acts and things that could hinder performance by any party of this document.

$6.2$ Duty

The Purchaser must pay any Duty payable in respect of the execution, delivery, performance and enforcement of this document, including Duty on the transfer of the PRL Shares.

6.3 Costs and expenses

Subject to clause 6.2, each party must bear its own costs and expenses in respect of the negotiation, preparation, execution and delivery of this document.

6.4 Assignment

No party may assign or otherwise deal with its rights or obligations under this document.

6.5 No Waiver

A party's failure to insist another party perform any obligation under this document is not a waiver of that party's right:

• to insist the other party perform, or to claim damages for breach of, that $(a)$ obligation; or
• to insist the other party perform any other obligation, $(b)$

unless the waiving party acknowledges the waiver in writing.

6.6 No Merger

The rights and obligations of the parties will not merge on completion of any transaction under this document (including Completion) and they will survive the execution and delivery of any assignment or other document entered into for the purpose of implementing any transaction (including on Completion).

6.7 Counterparts

This document may be executed in any number of counterparts and all of those counterparts taken together constitute one and the same instrument. An executed counterpart may be delivered by facsimile.

6.8 Entire Agreement

This document is the entire agreement between the parties about its subject matter.

6.9 Governing Law and Jurisdiction

• This document must be governed and construed in accordance with the laws $(a)$ applicable in South Australia.
• The parties irrevocably submit to the non-exclusive jurisdiction of the courts of $(b)$ South Australia.

6.10 Variation

A variation of any term of this document must be in writing and signed by the parties.

6.11 GST

• The Purchaser warrants that it is registered for GST. $(a)$

• To the extent that any Supply or Supplies under this document are subject to $(b)$ GST:

• the consideration payable by the Purchaser to the Vendor for, or in $(i)$ connection with, a Supply under this document does not include any GST;

• $(ii)$ the Purchaser must pay to the Vendor an additional amount (plus any interest, fines or penalties assessed by the Australian Taxation Office or a court or tribunal if the reason that the Vendor is or becomes liable for such interest fines or penalties is because of any act or omission of the Purchaser) on account of GST equal to the amount payable by the Purchaser for the relevant Supply or Supplies multiplied by the prevailing GST rate;

• $(iii)$ the Purchaser is required to pay the additional amount to the Vendor within 5 Business Days of any request from the Vendor; and

• $(iv)$ if a payment is to be made by the Purchaser to the Vendor under this clause 6.11, the Vendor must provide the Purchaser with a tax invoice which complies with the requirements of the GST Act.

• This clause 6.11 survives Completion. $(c)$

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EXECUTED as an agreement

Print Position Director / Secretary

Director / Secretary

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EXECUTED as an agreement

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EXECUTED by EASTERN STAR GAS LIMITED

in accordance with section 127(1) of the Corporations Act by:

EXECUTED by BLACK CYGNET PTY. LTD.

in accordance with section 127(1) of the Corporations Act by:

Signature

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Director / Secretary

Print Name

Print Position

Director / Secretary