Japan’s Mitsui & Co will buy a 35% working interest in the Kipper gas and condensate field from Australia’s Santos for A$520 million ($367 million).
The Kipper field, operated by ExxonMobil, is located in the Gippsland basin, approximately 45 kilometers off the coast of Victoria, Australia. Production of gas, condensate and LPG is expected to start in 2016, and the products are planned to be supplied to domestic market.
“Australian East coast gas demand is expected to grow substantially due to a start-up of three LNG projects in Queensland. Mitsui believes Australian East coast continuously require new investments in developing gas resources to meet such demand,” Mitsui said in a statement.
The Japanese company said it believed the acquisition of a domestic gas asset, which is less vulnerable to global oil price, would lead to a more robust energy asset portfolio against commodity price volatility.
Santos Executive Chairman, Peter Coates said: “The sale of Kipper realises good value for this asset despite difficult oil and gas market conditions in recent times.”
The sale is part of Santos’ move announced today to reduce a $3.5 billion net debt through $520 million from sale of interest in Kipper gas field to Mitsui E&P Australia Pty Ltd; $500 million private placement at a 15% premium to last close to an affiliate of the China-based international private equity firm, Hony Capital; and $2.5 billion fully underwritten accelerated pro-rata renounceable Entitlement Offer with retail entitlements trading
Coates said: “While the capital initiatives announced today mean that Santos is under no pressure to sell further assets, the strategic review attracted significant interest from substantial oil and gas industry operators and investors.
“We expect inbound interest may continue and we will respond accordingly in the normal course. We will only sell assets where there is a compelling value case for our shareholders, and it is consistent with the company’s strategy,” Coates added.
Santos today also announced it will appoint a new CEO, Clough’s Kevin Gallagher. Read more on that here : https://bit.ly/1RHND4Q
Offshore Energy Today Staff