Santos said the increase in write-offs resulted from the adoption of more objective carry forward guidelines for asset valuations.

While revenue increased by 1.3%, Santos saw its net profit plunge by 27.8% from $445.9 million in 2001 to $322.1 million in calender year 2002.

Full year earnings before interest, tax, depreciation, depletion and amortisation (EBITDA) exceeded the $1 billion mark for the third year in a row.

However, the 2002 EBITDA of around $1.084 billion was 2.9% less than the $1.117 billion EBITDA reported in 2001. This was despite record sales of 57 million barrels of oil equivalent and higher average realised oil price in the second half of the year.

Not helping Santos' cause was an admission by managing director, John-Ellice Flint, that the company will find it hard to match its 2002 production performance in 2003 and 2004.

Ellice Flint said, prior to acquisitions, production figures will likely to be around the levels achieved in 2000 and 2001. Sales volumes in 2003 are also expected to be down on the 2002 level.

Before exploration write-offs, Santos' full year operating profit of $392 million was within analyst's range of $341 million and $396 million.

"It has come in pretty close to our expectation. The underlying number was pretty good and that's what we tend to focus on. On the surface the write-off looks justified," said Auzeq Securities analyst Andrew Williams.

Santos fell 7c on release of its full year result to be currently trading at $5.92.