RUS | ENG | All
Enter the email or login, that you used for registration.
If you do not remember your password, simply leave this field blank and you will receive a new, along with a link to activate.

Not registered yet?
Welcome!

2021-08-04 12:10:00

AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN

AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN

SANTOS2ND AUG 2021 - Santos and Oil Search have today reached agreement on the merger ratio under the proposed merger and the additional terms set out in this release (“Revised Merger Proposal”). 

Under the Revised Merger Proposal, Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held via a Scheme of Arrangement. Following approval of the Scheme, Oil Search shareholders will own approximately 38.5 per cent of the merged group and Santos shareholders will own approximately 61.5 per cent.

The Board of Oil Search has confirmed that, subject to the completion of confirmatory due diligence and the agreement of a binding Merger Implementation Agreement, their intention is to unanimously recommend the Revised Merger Proposal, in the absence of a superior proposal and subject to an independent expert concluding that the scheme of arrangement is in the best interests of Oil Search shareholders.

The Revised Merger Proposal implies a transaction price of A$4.29 per Oil Search share, based on the closing price of Santos and Oil Search shares on 19 July 2021 (being the day prior to disclosure of the first proposal). This represents a 16.8 per cent premium to the Oil Search closing price on 19 July and a 16.4 per cent premium to the one-month VWAP on that day. In addition, the proposal represents the opportunity to deliver compelling value accretion to both sets of shareholders.

The merger of Santos and Oil Search would create a regional champion of size and scale with the following features:

  • Diversified portfolio of high quality, long-life, low-cost assets across Australia, Timor-Leste, Papua New Guinea and North America with significant growth optionality
  • Pro-forma market capitalisation of A$21 billion which would position the merged entity in the top-20 ASX-listed companies and the 20 largest global oil and gas companies
  • Combined 2021 production of approximately 116 million barrels of oil equivalent
  • Combined 2P+2C resource base of 4,983 million barrels of oil equivalent
  • Investment grade balance sheet with more than US$5.5 billion of liquidity to self-fund development projects, whilst maintaining further optionality and flexibility to optimise the portfolio
  • Target gearing of less than 30 per cent
  • Strong ESG credentials including maintaining Oil Search’s social and community investment in Papua New Guinea and North America, including the Oil Search Foundation
  • Substantial potential combination synergies. Santos has an excellent track record of integration and recently merged Quadrant Energy and ConocoPhillips’ WA and NT business unit into Santos, delivering more than US$160 million in annual synergies

The combination would also create greater alignment in Papua New Guinea supporting the development of key projects including Papua LNG, deliver new jobs and help support the local economy.

Oil Search shareholders would continue to participate in the merged entity and retain the opportunity to realise a premium for control as part of the merged entity.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the potential merger of Santos and Oil Search is consistent with Santos’ disciplined strategy to grow around our core assets.

“It represents a compelling combination of two industry leaders to create an unrivalled regional champion of size and scale with a unique diversified portfolio of long-life, low-cost oil and gas assets.

“The merged company would have strong cash generation from a diverse range of assets which provides a strong platform for sustainable growth and continued shareholder returns.

“The merger also builds on our industry-leading approach to ESG through the combination of Santos’ net-zero 2040 pathway, including its sector-leading CCS projects, and Oil Search’s unique social programs in PNG, underpinned by a strong balance sheet to fund the transition to a lower carbon future.

“The Revised Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.”

Santos and Oil Search have committed to conduct best endeavours due diligence subject to appropriate confidentiality arrangements over a period of approximately four weeks with the aim of entering into a Merger Implementation Agreement, which would contain conditions to completion of the merger such as regulatory approvals.

Each party will be free to declare ordinary dividends in accordance with existing dividend policy through to signing of the Merger Implementation Agreement. Should a party declare a dividend outside its existing dividend policy before the signing of the Merger Implementation Agreement, there would be an appropriate adjustment to the merger ratio.

Citigroup and JB North & Co are acting as financial advisers and Herbert Smith Freehills and Dentons are acting as legal advisers to Santos.

-----


Earlier:

AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2021, May, 27, 13:00:00
AUSTRALIA'S RENEWABLE STORAGE $2.5 BLN
Officials said the new power contract would begin in July 2022, when its existing contract with Shell expires, and run for 10 years.
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2021, April, 22, 11:10:00
AUSTRALIA'S SANTOS REVENUE $964 MLN
First quarter revenue of US$964 million was stronger despite the contractual 3-month lag in oil-linked LNG prices and lower overall sales volumes
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2021, April, 19, 16:20:00
AUSTRALIA'S SANTOS RATIONG 'BBB'
Santos notes the announcement from Fitch Ratings (Fitch) assigning Santos a BBB credit rating with stable outlook.
All Publications »
Tags: AUSTRALIA, SANTOS
Chronicle:
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 6, 10:59:00
6TH ANNUAL LNG SUMMIT USA
The 6th Edition of Wisdom’s Much Acclaimed Annual LNG Summit Will Be Held Live in Houston - PREPARING THE INDUSTRY FOR THE RISE IN DEMAND FOR LNG
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 6, 10:58:00
9TH INTERNATIONAL LNG CONGRESS LNGCON 2023
9th International LNG Congress (LNGCON 2023) 6-7 March, 2023 Link to the Congress website: https://bit.ly/3tXVmr7
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 6, 10:55:00
S.KOREAN NUCLEAR POLICY
"it is imperative that new energy policy goals and directions are set so as to better accomplish carbon neutral government projects and the expansion of nuclear power."
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 6, 10:50:00
RUSSIAN NUCLEAR FOR ARMENIA
The joint working group was chaired by Armenia’s Deputy Minister of Territorial Administration and Infrastructures, Hakob Vardanyan. The Russian delegation was headed by Viktor Kolesnikov, project manager and Advisor to the President of Rusatom Energy Projects.
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 6, 10:45:00
IRANIAN NPP 360 MW
At the moment, the only functioning nuclear power plant in Iran is the first stage of the Bushehr NPP, built with Russian assistance.
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 5, 12:35:00
OIL PRICE: BRENT NEAR $113, WTI ABOVE $109
Brent fell by 60 cents, or 0.5%, to $112.89 a barrel, WTI climbed $1.13, or 1.1%, to $109.58 a barrel.
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
2022, July, 5, 12:30:00
RUSSIA, INDIA: RELIABLE PARTNERS
Many of our companies, including energy companies, are operating in Indonesia. There is interest in developing the national nuclear power industry.
All Publications »