The Independent directors of Novus had already endorsed the increased Medco offer to the company’s shareholders and have now reiterated their recommendation in the absence of a superior offer emerging.

“Our offer has been in the market for a number of months now and no other bid, other than Sunov’s abandoned offer, has emerged for Novus despite the efforts of the Novus Board over that period,” said Medco Energi chief executive officer Hilmi Panigoro.

Subsequently Santos announced today that, given Sunov’s decision not to proceed with its bid, it has agreed with Medco Energi to acquire part of Novus’

Indonesian interests and all of Novus’ Cooper Basin interests.

Sunov and Santos had previously made arrangements regarding the conditional acquisition of certain Novus assets, which have now been terminated.

Santos has now agreed to acquire an 18% interest in the Brantas Production Sharing Contract (PSC), a 9% interest in the Kakap PSC, both in Indonesia, and Novus’ interests in the Cooper Basin.

The total cash consideration is US$110 million, adjusted for an effective date of 1

January 2004, plus contingent consideration linked to reserves upside in the Wunut field, which is capped at US$3.5 million.

Santos’ managing director, John Ellice-Flint, said, “The arrangements with

Medco create an opportunity for Santos to reinforce its commitment to and relationships in Indonesia and supplement our portfolio with attractive assets which match our strategy and will be both earnings and cash-flow accretive to

Santos.”

Medco has also agreed to separate arrangements with Silk Route Investments in respect of Novus’ interests in the US, Middle East and Pakistan. Silk Route will have an option to acquire up to 49% of the Middle East assets and 100% of the Pakistan assets.