Oil Search Becomes Part Of Santos As Merger Goes Ahead
Australian energy company Santos said it has completed the merger deal with Papua New Guinea-focused Oil Search worth around US$16 billion.
Santos said that the merger with Oil Search was made effective on Friday, the 10th December, following the approvals by Oil Search shareholders and the National Court of Papua New Guinea.
Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held on the record date of December 14, 2021. Oil Search shareholders would own about 38.5 percent of the merged group and Santos shareholders would own 61.5 percent.
“The merger combines two industry leaders to create a regional champion of quality, size, and scale with a unique and diversified portfolio of long-life, low-cost oil and gas assets,” Santos Chairman Keith Spence said.
“We look forward to integrating our businesses to create one high-performing team – with a vision of becoming a global leader in the energy transition,” Mr Spence added.
Following the implementation of the merger, three non-executive directors from Oil Search will join the Santos Board. Santos’ head office will remain in Adelaide.
“Santos and Oil Search are stronger together and will have increased scale and capacity to drive a disciplined, low-cost operating model and unrivalled growth opportunities over the next decade,” Santos Managing Director and Chief Executive Officer Kevin Gallagher stated.
“The merger creates a company with strong and diversified cash flows, providing a platform to deliver shareholder returns and successfully navigate the transition to a lower-carbon future.
“Additionally, the merger builds on our industry-leading approach to ESG through the combination of Santos’ leading CCS capabilities with Oil Search’s social programmes in Papua New Guinea and North America,” Mr Gallagher concluded.
It is worth reminding that Santos entered into a definitive merger deal back in September this year. Last Tuesday, the 7th December, Oil Search shareholders voted for the proposed merger with 95.1 percent of them voting in favour.
The combined entity will have 2021 production of approximately 116 million barrels of oil equivalent, a 2P+2C resource base of 4,867 million barrels of oil equivalent, and an investment-grade balance sheet with more than $5.5 billion of liquidity to self-fund development projects.
The merged entity will be one of the 20 largest global oil and gas companies.
Source: Rigzone