jerkoff #2 results just out!!!!!!, page-23

sto/cue article reads well. up day friday Jeruk results exceeds Santos' estimates
January 20, 2005 - 7:34PM

Australia's third largest oil and gas producer, Santos Ltd said test results at its much-hyped Jeruk well in Indonesia indicated a oil reservoir even bigger than it expected.

"A hydrocarbon column of at least 379 metres has ... been encountered in the Jeruk field indicating likely recoverable reserves in excess of the pre-drill estimate of 170 million barrels," Santos said.

The market has been waiting for Santos to confirm the size of the Jeruk reserves in its East Java acreage.

"The results of Jeruk-2 are very encouraging (and) we are currently integrating all data into a final evaluation of the well which will help us narrow a likely reserve range for the field," Santos managing director John Ellice-Flint said.

Analysts said the Santos share price already included a 50 cent premium based on the field's potential.

Santos shares closed on Wednesday eight cents lower at $8.60.

In a report out this week UBS energy analyst Gordon Ramsey said the Jeruk structure was estimated to contain between 250 million and 300 millions barrels of oil.

Advertisement
Advertisement"We view Jeruk as a potential re-rating trigger for Santos," Mr Ramsay said.

"Although early days, we believe Jeruk has the potential to be worth up to around $1.50 a share to Santos.

"We assume just over half of this potential value, based on Santos 170 million barrel pre-drill estimate, is included in Santos' share price."

Santos is the operator of the well and has a 50 per cent stake in the field, with PT Medco Sampang holding the remaining 50 per cent stake.

In a report out late on Wednesday Santos said the results from the third drill stem test indicated oil was present at the Jeruk field down to at least 5,460 metres.

The well is in 44 metres of water and about 42 kilometres from the Indonesian city of Surabaya.

The drilling rig will now move into drill Santos's Agung-1 well in its North Bali 1 production sharing contract.

UBS said the Agung well was another interesting exploration prospect in East Java that could be worth even more to Santos than Jeruk.

Santos said a 3D seismic survey was currently being conducted in the Sampang production sharing contract which will extend over the Jeruk field area.

A program to appraise the field more fully will be developed once the survey is completed.