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The company has indicated that in order to boost its depleting gas and oil projects, it could consider some of Chevron Texaco's Papua New Guinea portfolio, valued by analysts at $500 million, and ExxonMobil's interests in Australia's Cooper Basin.
However, managing director John Ellice-Flint told a Securities Institute briefing that all acquisition possibilities would be treated very carefully.
"You can count the number of (energy) acquisitions which made money for shareholders this year on your left hand.
"You have to be very careful."
Later Mr Ellice-Flint said the amount of debt the company would take on would depend on how quickly any new asset could start contributing to Santos earnings.
He said the company was concentrating on exploration in 2003 moving into deepwater exploration offshore Australia.
Santos has acquired rights to two deepwater permits in the Otway Basin off western Victoria and the Sorell Basin off Tasmania's west coast.
Santos has planned to spend $146 million on 26 wildcat drills during the calendar year.
