Annual Report 2004 23
In 2004, Santos continued its
normal business of actively
managing its portfolio through
the divestment of non-core assets
and the acquisition of assets that
fit well with existing Santos
assets or can add to the ability 
of the Company to meet its
strategic goals.
As a result of this activity, 
Santos realised an after-tax profit
of $47.4 million on oil and gas
asset sales and will continue to
high-grade its portfolio on an
ongoing basis. 
Santos entered into an agreement
with PT Medco during the first
half of 2004 to acquire some of
Novus Petroleum’s Indonesian and
Cooper Basin assets conditional
on the success of PT Medco’s
takeover offer for Novus, which
was ultimately successful.
Specifically, Santos announced 
in September 2004 that it had
executed formal agreements to
acquire an additional 4.75% of
the South Australian Cooper
Basin, 18% of the Brantas PSC
and 9% of the Kakap PSC from
Medco for US$110 million. On 
31 December 2004, Santos paid
Medco US$98 million for the
majority of the assets, with
payment for the remaining 2.75%
of Kakap PSC expected to be
made in the first quarter of 2005.
This acquisition was an important
piece in the strategic puzzle to
tie up access to follow-up
potential from the successful
exploration at Jeruk and to
provide a production base for 
the newly established Indonesian
core area.
Also during the first half of 2004,
Santos divested its remaining
18.4% shareholding in Magellan
Petroleum Australia Ltd, raising
approximately $10.6 million.
Early in the second half of 2004,
Santos concluded the sale of its
non-core onshore Otway Basin
interests to Origin Energy for
$25.75 million. This sale 
resulted in an after-tax profit 
of $18 million that was booked 
in 2004.
In addition, an exploration 
joint venture was formed with
ConocoPhillips in the NT/P61
block offshore Darwin, Northern
Territory, to drill the Caldita well
and provide Santos with access
rights to a potential expansion of
the Wickham Point LNG facility.
This deal further enhances Santos’
infrastructure strategy to leverage
its position within vital
infrastructure to improve
shareholder value while reducing
the risk profile of the wildcat
exploration program.
During the third quarter, Santos
expanded its offshore Victorian
gas interests to 50% in both the
Patricia-Baleen and the Sole gas
fields through the acquisition
from Trinity Gas Resources of an
additional 30% interest in the
Patricia-Baleen gas field and
associated processing facilities in
eastern Victoria and an additional
15% interest in the Sole gas field. 
Santos earned its 30% additional
equity in the Patricia-Baleen gas
field by meeting Trinity’s
remaining share of drilling costs
on the Baleen 4 well which was
drilled successfully as a sidetrack
well of Baleen 3. Santos will earn
its 15% additional equity in the
Sole gas field by meeting certain
development costs on behalf of
Trinity, if and when the Sole joint
venture partners proceed to
develop this gas resource.
The acquisition of these Victorian
gas interests strengthens Santos’
domestic gas and infrastructure
strategy that was further
enhanced by the OMV purchase
announced early in 2005.
Importantly, Santos is now the
operator of the strategic Orbost
gas processing facility.
Late in the year, Santos sold its
18.02% share in the Carpentaria
Gas Pipeline between Ballera 
and Mount Isa in Queensland 
to Australian Pipeline Trust for 
$59 million, resulting in a 
$21 million after-tax profit 
that was booked in the 2004
financial year.
ENHANCING THE PORTFOLIO
BRANTAS PSC
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