Photo: Illustration purposes only (Image courtesy of Ophir)

Santos sells Southeast Asian assets to Ophir

Australian LNG player, Santos sold its Southeast Asian assets to the London-based Ophir Energy for a cash consideration of $221 million. 

The portfolio of assets includes material producing assets in Vietnam and Indonesia plus exploration and appraisal assets in Malaysia, Vietnam and Bangladesh.

Ophir said in its statement the transaction is in line with its strategy of rebalancing its portfolio towards a larger production and cash flow base to enable it to support the refocused exploration portfolio.

Santos noted in its statement that the transaction marks the company’s exit from Vietnam, Indonesia, Malaysia and Bangladesh.

The assets included in the transaction include interests in Vietnam’s blocks 12W PSC (31.875 percent), 123 PSC (50 percent) and 124 PSC (40 percent), Indonesia’s Madura Offshore PSC (67.5 percent) and Sampang PSC (45 percent), Santos said.

Assets also include 45 percent interest in SS-11 PSC in Bangladesh and 20 percent in the Deepwater block R PSC in Malaysia.

Santos added that the producing assets sold are relatively late-life and are not prioritized for capital in the company’s portfolio. The company’s share of production from the assets in the first quarter of 2018 was 1.4 million barrels of oil equivalent.

Ophir added that the 2018 proforma forecast production from the assets is around 13,500 boe/d, increasing Ophir’s 2018 production to around 25,000 boe/d. The 2P reserves increase of over 40 percent from 49.4 mmboe to 70.6 mmboe.

Under the terms of the sale, the transaction will have an effective date of January 1, 2018, with the completion is expected in the second half of 2018.

Ophir will finance the transaction through existing financial resources and a new 18-month acquisition bridge facility of up to $130 million.

Santos said that the proceeds from the sale will be applied to further reduce its net debt which stood at $2.5 billion at the end of March 2018.

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