Australian LNG player Santos said it will acquire its compatriot Quadrant Energy for $2.15 billion as part of its growth strategy.
Quadrant Energy holds natural gas and oil production, near and medium-term development, appraisal and exploration assets across more than 52,000 square kilometers of acreage, predominantly in the Carnarvon Basin offshore WA, Australia’s largest offshore oil and natural gas province.
The company’s conventional natural gas assets include significant portfolio overlap with Santos, meaning the latter’s proforma 2P reserves will increase by 220 mmboe and the proforma production will rise some 32 percent by 19 mmboe.
Santos managing director and CEO Kevin Gallagher said, “This acquisition delivers increased ownership and operatorship of a high quality portfolio of low cost, long-life conventional Western Australian natural gas assets which are well known to Santos, and importantly significantly strengthens Santos’ offshore operating capability.”
Santos added in its statement that the consideration comprises of a $2.15 billion upfront payment, with contingent payments linked to the Dorado oil 2C certification of over 100 mmbbls and future FID decision as well as royalty over any future project revenue in Bedout Basin, excluding Dorado production.
The acquisition will have an effective date of January 1, 2018, with completion expected by the end of the year, Santos said.