Finance and InsuranceOffshore

Santos and Oil Search ink merger deal

Santos and Oil Search have struck a definitive deal to merge the two companies in an all-scrip transaction, setting the stage to position the new entity in the top 20 ASX-listed companies and the 20 largest global oil and gas players.

Upon completion of the merger, Oil Search shareholders will own approximately 38.5% of the merged entity and Santos shareholders will own around 61.5%.

According to Santos, the merger will create a “regional champion of size and scale” with a pro-forma market capitalisation of around A $21 billion ($15.5 billion) and a diverse portfolio of assets spread across Australia, Timor-Leste, Papua New Guinea, and North America.

Oil Search chairman, Rick Lee, said: “Put simply, this merger provides Oil Search shareholders with a compelling opportunity to participate in a larger entity with significant scale, product mix, ESG and geographic diversity, and access to capital. The combined entity will have the capacity to deliver on an exciting pipeline of organic growth opportunities.”

Santos chairman Keith Spence said: “The merger represents an attractive combination of 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.

“The merged entity will be well positioned for success in the new era of oil and gas, with strong cashflow generation from a diverse range of assets providing a platform to self-fund growth and deliver shareholder returns.”

The merger is subject to a limited number of customary conditions including Oil Search shareholder approval, regulatory approvals and Papua New Guinea court approval.

Last month, Woodside and BHP entered into a merger deal to combine their oil and gas portfolios by an all-stock merger creating a global top 10 independent energy company by production.

Adis Ajdin

Adis is an experienced news reporter with a background in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy.
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