PERTH (miningweekly.com) – Oil and gas producer Santos and takeover target Oil Search have extended the exclusivity agreement between the two companies for a further week, until September 13.
The two companies in August announced a potential merger to create a A$21-billion oil and gas giant, under which Oil Search shareholders would 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% of the merged group and Santos shareholders will own approximately 61.5%.
The merged entity would have a diversified portfolio of high quality, long-life, low-cost assets across Australia, Timor-Leste, Papua New Guinea (PNG) and North America with significant growth optionality, and would have a 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, with a combined 2021 production of approximately 116-million barrels of oil equivalent.
The enlarged company would have a combined 2P+2C resource base of 4.9-billion barrels of oil equivalent, an investment grade balance sheet with more than $5.5-billion of liquidity to self-fund development projects, whilst maintaining further optionality and flexibility to optimise the portfolio, a target gearing of less than 30%, and strong environmental and social governance credentials including maintaining Oil Search’s social and community investment in PNG and North America, including the Oil Search Foundation.