Santos executives to meet with PM, Kua over Oil Search merger

The National Business

SANTOS Ltd executives are expected to meet Prime Minister James Marape today regarding the company’s merger with Oil Search Ltd.
This was confirmed by Petroleum Minister Kerenga Kua yesterday.
“Yes, confirm. They will be meeting with the Prime Minister and myself,” Kua told The National yesterday.
“At this stage, I have got nothing to report.”
Santos and Oil Search last month formalised their merger by entering into a merger implementation deed.
According to a market announcement, the companies have completed reciprocal confirmatory due diligence which started on Aug 6.
Under the terms of the merger, Oil Search shareholders will receive 0.6275 per cent new Santos shares for each Oil Search share held on the record date of the scheme of arrangement.
Oil Search shareholders will own around 38.5 per cent of the merged entity.
Santos shareholders will own around 61.5 per cent.
The Oil Search board of directors unanimously recommended that Oil Search shareholders vote in favour of the merger.
According to Santos, the combination of Santos and Oil Search would create a regional champion of size and scale with following features:

  • DIVERSIFIED portfolio of high quality, long-life, low-cost assets in Australia, Timor-Leste, Papua New Guinea and North America with significant growth optionality;
  • PRO-forma market capitalisation of around AUS$21 billion (K53 billion) which would position the merged entity in the top-20 ASX-listed companies and the 20 largest global oil and gas companies;
  • INVESTMENT grade balance sheet with more than US$5.5 billion (K19 Billion) of liquidity to self-fund development projects, while maintaining further optionality and flexibility to optimise the portfolio.

Oil Search has a focused portfolio comprising:

  • 29 per cent interest in the PNG LNG project;
  • OPERATED oil and gas assets in PNG which contribute 20 per cent of PNG LNG gas and produce all of PNG’s oil;
  • 51 per cent interest in its Alaska oil assets which are the largest recent US oil discovery; and,
  • 22.8 per cent interest in Papua LNG, a brownfield LNG growth opportunity.