These include an additional 33 per cent working interest in the Runnells Gas Unit and associated facilities, an additional 33% working interest in the Ashland Deep Prospect, a 33% interest in the Triple Play Prospect and 635 net acres of undeveloped land.

"This is part of Santos' strategy of acquiring international assets with growth potential through reservoir optimisation and exploration. The area's proximity to infrastructure creates a favourable environment for creating economic value since production can be established quickly," Santos managing director, Mr John Ellice-Flint said.

Santos USA will acquire an estimated proved and probable reserves of 15.5 billion cubic feet of natural gas and 700,000 barrels of liquids, including 200,000 bbls of natural gas liquids and 500,000 bbls of condensate.

Thanks to a 100% drilling success rate in the Texas Gulf coast, Santos USA's production has grown from eight million cubic feet per day equivalent to 15 mmscfde prior to the above acquisition. Santos USA is forecasting a net production rate of 30 mmscfde by the end of 2001.