Annual Report 20042
Chairman’s Review
DELIVERING ON THE STRATEGY
Dear Shareholder,
I am pleased to report that 
in 2004 Santos continued 
to deliver on its strategy to
transform the Company into a
truly international exploration
and production business with
world-class operations.
While the year saw many
positives in terms of development
and exploration success, it did
not get off to a good start with
the incident on New Year’s Day 
at the Moomba processing facility
in central Australia. 
Importantly, Santos was able 
to work effectively with its key
stakeholders, including customers,
joint venturers and government
departments, to minimise the
commercial impacts.
Natural gas supplies were quickly
restored, in part by recovering
processed gas from underground
storage reservoirs. Liquids
processing facilities were
progressively reinstated allowing
further increases to gas production
and sales volumes, with the 
ramp-up to full liquids production
achieved by August as planned.
A large proportion of the costs
and foregone revenues associated
with the repair of the damaged
plant and the reduced oil and 
gas production volumes are 
being recovered under 
insurance policies.
Due to the long cycle times
inherent in the oil and gas
business, it had been recognised
that 2004 would be a year in
which production was marginally
below the previous year, with
subsequent increases in 2005 
and beyond driven by new
development projects. 
In this light, it is pleasing to
report that the Minerva gas and
Bayu-Undan liquids projects
commenced production during the
year as planned, while first oil
from Mutineer-Exeter and several
other key growth projects are
progressing to plan.
Indonesia matured into a core
area during 2004, through a
strategy of prudent acquisition,
portfolio management and
exploration. In particular, the
Jeruk discovery has the potential
to add significant value, with
further evaluation activities
underway.
Even with the large effort
expended on the Moomba
incident, Santos was able to
deliver strong results for 2004,
reflecting higher average prices
across most products.
Group sales revenue increased by
2.5% to a record $1,501 million,
earnings before interest and tax
improved by 23% to $574 million
and net profit after tax rose by
16% to $380 million.
This strong financial performance,
combined with the confidence
that Santos will continue to grow
earnings in the future, enabled
the Board to increase the final
dividend on ordinary shares by
20% from 15 cents to 18 cents
per share, fully franked. For the
full year, dividends increased 
by 10% to 33 cents per share,
compared with 30 cents per share
in each of the four previous
years. On a grossed up basis, this
represents a yield of over 5%.
In response to increasing interest
and enquiry from shareholders,
the Dividend Reinvestment Plan
has been reintroduced and
applied to the final dividend 
paid during March 2005.
Santos continued its proactive
approach to capital management
with the redemption and buyback
of the outstanding Preference
Shares and the issue of FUELS
(Franked Unsecured Equity Listed
Securities). This initiative was
driven by the alignment of
Australian accounting standards
with international requirements,
and closed oversubscribed, raising
$600 million in new equity.
The total shareholder return for
the year, including share price
appreciation and dividends paid,
was 28% – an excellent result.
In addition to our focus 
on shareholder value, Santos 
takes its corporate social
responsibilities seriously and 
is committed to sustainability 
as a core value in all operations.
The Company’s first Sustainability
Review was released during 
the year.
Santos continues to be
recognised for the high quality 
of its corporate governance,
receiving a measure of five out 
of five for corporate governance
for the third successive year 
in an independent report prepared
by leading accounting and
management firm, Horwath, 
and the University of Newcastle.