The offshore regulator approved its environmental plan late last year.
In 2021 Santos announced plans to drill three exploration wells offshore Western Australia: Yoorn-1, Jelen-1 and Parnassus-1 over 2022-23.
All were designed to find new gas supply for Varanus Island, which has been running low since the earlier-than-expected depletion of the Reindeer field.
Microcap Bounty Oil and Gas said last year it had been looking forward to a success at Yoorn-1 as located on the border of one of its permits and could help prove up its own Cerebus permits, which remain undrilled to date.
On February 14 this year Santos' updated reserves and resources statement noted 26 million barrels of oil equivalent reduction in Western Australia, primarily from earlier than expected water ingress at the Spar/Halyard field.
"Santos expects to recognise an impairment of approximately US$147 million as a result of the Spar/Halyard reserves reduction," it said.
Separately at the end of last year it decided to walk away from Timor Sea exploration after getting a tick for its environmental plan for geotechnical work just one year ago.
It had planned to use the work to underpin a wildcat, Stairway-1 this year.
The Spartan field will backfill Varanus Island, which sends gas to Western Australia's slowly but inexorably tightening gas market, but longer term more feedstock is needed.
Santos chief Kevin Gallagher said last year when his company sanctioned the Pikka oil field in Alaska but delayed sanction of the Dorado oil field he planned an integrated gas and oil development from the get-go rather than a staged development that see would oil hit the market first as gas was reinjected into wells during phase 1.
This would mean Santos no longer had to drill up and down the Carnarvon Basin in search of gas.
The company's offshore project proposal for Dorado was approved in February but did not include an integrated development.
It drilled duster Dancer-1 at the end of 2021.
The well was close to its declining Reindeer field, which supplies the Western Australian domestic gas market.
"Dancer-1 was not a success... that'll be in the next quarterly report," managing director Kevin Gallatgher said to Energy News during a press briefing a year ago.
In 2019 Santos made a commercial discovery at the nearby Covus-2 well in WA-45-R.
Activist investor's slam Santos' exploration spend
Ironically one of the main concerns launched by UK activist investors Snowcap, run by 20-something twin brothers, has been the spending by Santos on exploration.
Snowcap has attacked the company's growth at all costs mindset, lack of capital return to shareholders, executive pay, climate targets and safety record.
"In the past five years, Santos has returned an average of just 13% of operating cash flows to shareholders, which is substantially below peers who have returned an average of 32%, and a fraction of Santos' spend on exploration and development during this time," Snowcap said.
It contrasted this with Woodside's 26%.
Santos' exploration costs in 2022 were US$148 million and in 2021 $121 million.
