text: **OPERATING CASH FLOW AND CAPITAL EXPENDITURE**
  $million 
  
  1000 
  **930**
  
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              [html]<thead><tr><td>1000</td><td>930</td><td>‘ ight on target at 5030 million – record year for Santas – spproaching a level which is double DD & A, reflecting how apidly the portfolio is changing.</td></tr></thead><tbody><tr><td>800</td><td>7660</td><td>821</td></tr><tr><td>||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||</td><td>600</td><td>605</td></tr><tr><td>Santos will continue with a high development expenditure in 2005, but expects to spend more in 1ine</td><td>400</td><td>zoo</td></tr><tr><td>Table</td><td>1</td><td>ii</td></tr><tr><td>Table</td><td>spend is estimated to be about $ 150 million, while development snent is, exterted to, he reduced</td><td>‘ 01</td></tr><tr><td>Percentage</td><td>13</td><td>‘ 04</td></tr><tr><td>to 5530 million and delineation to 590 million. Other capital spending is expected to be reduced to $ 80 million.</td><td>Table</td><td>CASH FL0W</td></tr><tr><td>LOWER</td><td>This results in a total. planned capital expenditure for 2005 of approximately $ 850 million.</td><td>AMORTISATIONAII things being equal, DD & A could have been expected to</td></tr><tr><td>While Santosyear, this iscash flows.</td><td>Characteristics</td><td>be lower this year, as Santos produced lower volumes and had written off the Heytesbury plant in the onshore Otway Basin</td></tr><tr><td>There were I in trade deb reflecting th and the pay</td><td>ge movements ors between years, timing of liftings ents for them.</td><td>FINANCIAL FLEXIBILITY DVTACTSantos ended the year in a strong financial position with itsFinancial flexibility intact, despite the record development spending.</td></tr><tr><td>last year.</td><td>ctors caused an OD & A. Firstly, visions were negative</td><td>In addition, been paid forelating to t A total of $: recognised ‡</td></tr><tr><td>antos has not yet the insurance claime Moomba incident. 7 million was sundry income,</td><td>The FUELS issue was successful and Santos ’ gearing increased only marginally, despite the large capital program in 2004.</td><td>revisions were predominantly in producting areas which ' s thickelial increased controlled controlled controlled controlled by areas where Santos is not yet producing or where straight line depreciation is dominant, for productiont</td></tr><tr><td>which represents an estimate of the amount receivable from the amount receivable from the additional costs and regiacement plant and equipment. At year end of specialists, not chown as part of operating cash flow. The final quantificati</td><td>This is important in Santas ' business as the Company needs to be able to fund exploration success as it : occurs, and our development projects are increasing In size.</td><td>Secondly, on the future development cost side, depletion is up partly because Santas is starting to factor in higher steet and service company costs into long - term economic models.</td></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr><tr></tr></tbody>
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