Friday, October 20, 2006

Santos getting stuck in the mud

As mud continues to flow from the Banjar Panji gas well in East Java the
clean-up bill has risen to $US180m. The figure means Australian-listed
Santos, an 18-per-cent partner, has an exposure of $A43.7m. Santos says it
has insurance cover for such events, but insurance investigations are still
continuing. The project's 50-per-cent partner, Lapindo Brantas, has already
announced it will be receiving $US27.5m from its insurance policy. Since
May 2006 the well has been spewing up to 150,000 cubic metres of "rotten
egg" gas each day. Santos shares remained steady but will they continue to
remain steady ?

This is one business it is probably best to be out of for the moment.

My recommendation would be to SELL and look for safer deals elsewhere.

Good Luck investing.

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