Santos, which was granted 100% of the 5300sq.km NT/P61 exploration permit in 2001, will retain a 40% interest in the permit area.

The permit is also adjacent to the Santos-operated Evans Shoal gas field and is 390km from the Bayu-Undan Liquids and LNG fields, which are currently producing liquids and will commence exporting LNG early in 2006.

“Santos and ConocoPhillips have reached an understanding with respect to the use of existing infrastructure in the event of a significant gas discovery,” said Santos managing director, John Ellice-Flint.

“The Timor Sea region is developing as an important gas province and both companies are very familiar with the geology and the domestic and export gas market opportunities in the area.

“We look forward to working closely with ConocoPhillips to add further large reserves that may add to the encouraging outlook for this region,” said Ellice-Flint.