Australia’s third-largest oil and gas company said this morning that it had today entered into an definitive agreement with Slough Estates USA to hasten its acquisition of Slough’s ownership of Tipperary and TOGA.

Slough’s interests, comprising a 54% shareholding in Tipperary, a 10% equity interest in TOGA, and debt owed to Slough by Tipperary will be acquired by Santos effective 13 July 2005 (US time). This purchase was originally scheduled to take place in the fourth quarter of this year.

The acquisition price for the Tipperary shares and warrants held by Slough is based on US$7.39 per share. Santos has also agreed with Tipperary to increase to US$7.43 per share the amount to be received by the minority shareholders under the previously announced merger.

Total cash for the acquisition, including the assumption of debt, remains unchanged at about US$466 million, Santos said.

Following settlement of the Slough interests, Santos will be entitled to appoint a majority of the members of the Tipperary board.

Three independent directors will continue to serve on the board depending on a Tipperary shareholders' meeting to approve the merger, which is expected to take place early in the fourth quarter.

The takeover will make Santos the largest coalbed methane producer in Australia, overtaking Origin Energy.

The acquisition gives Santos operatorship and a 75% operated working interest of the Fairview field in southern Queensland and CBM blocks in the US.

The acquisition will do much to offset declining production from Santos' Cooper/Eromanga Basin gas fields and will ensure that Santos can continue to meet its Australian gas contracts.