Offshore staff

(Australia) -- Australian explorer Santos Ltd. will drill a second sidetrack, Dua-4X ST2, to evaluate gas and oil reservoirs in the southern fault block of the Dua structure offshore Vietnam. This follows the Dua-4X discovery in block 12E.

Following completion of Dua-4X ST2, the 12E-CS-1X will be drilled on the Blackbird prospect to explore a large tilted fault block up-dip of an existing well, 12E-LK-1X, which encountered very good oil shows, said Santos in announcing the Dua-4X discovery.

Santos said it participated in the Dua-4X well having agreed in April this year to take a 37.5% interest in two Vietnam exploration permits - blocks 12E and 12W.

The farm-in will be fully effective after Santos has funded a proportion of the costs of a two-well drilling program.

Dua-4X, drilled down-flank from the 1974 Dua-1X discovery well, flowed 1,500 b/d of oil. Following the intersection of hydrocarbons in the Dua 4X vertical well, a sidetrack, Dua-4X ST1, was drilled for more geological information.

Wireline testing of both Dua-4X and Dua-4X ST1 recovered oil samples, cores, and pressure data to help define the quantity and quality of hydrocarbons within the northern flank of the Dua structure. As planned no drill stem test was performed, said Santos.

Premier Oil PLC is the block operator with 37.5% stake and Delek Energy, 25%, is the third partner.

6/30/06