UPDATE 1-Australia's Santos says CEO Ellice-Flint to retire

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SYDNEY, March 25 (Reuters) - Australian oil and gas producer Santos Ltd (STO.AX: Quote, Profile, Research) said on Tuesday its Managing Director John Ellice-Flint will step down with immediate effect.

Santos said executive vice president David Knox will take charge as acting chief executive until Ellice-Flint's replacement is found.

Santos did not provide a reason for the sudden departure of Ellice-Flint but said it has begun an international search for a successor and that Knox was strong candidate for the chief executive role.

"The Board has total confidence that David has the necessary skills and experience to lead the company while we undertake a comprehensive selection process for John's successor. We expect that Mr Knox will be a strong candidate for that role," Santos Chairman Stephen Gerlach said in a statement.

Ellice-Flint, at the helm of Santos since 2000, has overseen the Adelaide-based company's expansion into a regional oil and gas field operator as well as a producer of liquefied natural gas and coal seam gas.

Santos said the decision to appoint a new chief executive comes as the company reaches a critical stage of transition with a 15 percent state-imposed shareholding cap soon to be removed, as well as the increasing pace of planning for the Gladstone LNG project.

Shares in the group were up 1.7 percent at A$13.25 in early trade, lagging a 3.7 percent rise in the broader index. ($1=A$1.10) (Reporting by Denny Thomas and Fayen Wong)