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  • Santos agrees proposed merger ratio with Oil Search
    édité le 02/08/2021 - Plus de news de "Santos" - Voir la fiche entreprise de "Santos"


Santos agrees proposed merger ratio with Oil Search
Santos and Oil Search have reached agreement on the merger ratio under the proposed merger and the additional terms set out in this release (“Revised Merger Proposal”).

Under the Revised Merger Proposal, Oil Search shareholders will 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 per cent of the merged group and Santos shareholders will own approximately 61.5 per cent.

The Board of Oil Search has confirmed that, subject to the completion of confirmatory due diligence and the agreement of a binding Merger Implementation Agreement, their intention is to unanimously recommend the Revised Merger Proposal, in the absence of a superior proposal and subject to an independent expert concluding that the scheme of arrangement is in the best interests of Oil Search shareholders.

The Revised Merger Proposal implies a transaction price of A$4.29 per Oil Search share, based on the closing price of Santos and Oil Search shares on 19 July 2021 (being the day prior to disclosure of the first proposal). This represents a 16.8 per cent premium to the Oil Search closing price on 19 July and a 16.4 per cent premium to the one-month VWAP on that day. In addition, the proposal represents the opportunity to deliver compelling value accretion to both sets of shareholders.

The merger of Santos and Oil Search would create a regional champion of size and scale with the following features:

   - Diversified portfolio of high quality, long-life, low-cost assets across Australia, Timor-Leste, Papua New Guinea and North America with significant growth optionality
   - 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
   - Combined 2021 production of approximately 116 million barrels of oil equivalent
   - Combined 2P+2C resource base of 4,983 million barrels of oil equivalent
   - Investment grade balance sheet with more than US$5.5 billion of liquidity to self-fund development projects, whilst maintaining further optionality and flexibility to optimise the portfolio
   - Target gearing of less than 30 per cent
   - Strong ESG credentials including maintaining Oil Search’s social and community investment in Papua New Guinea and North America, including the Oil Search Foundation
   - Substantial potential combination synergies. Santos has an excellent track record of integration and recently merged Quadrant Energy and ConocoPhillips’ WA and NT business unit into Santos, delivering more than US$160 million in annual synergies

The combination would also create greater alignment in Papua New Guinea supporting the development of key projects including Papua LNG, deliver new jobs and help support the local economy.

Oil Search shareholders would continue to participate in the merged entity and retain the opportunity to realise a premium for control as part of the merged entity.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the potential merger of Santos and Oil Search is consistent with Santos’ disciplined strategy to grow around our core assets.

“It represents a compelling combination of two industry leaders to create an unrivalled regional champion of size and scale with a unique diversified portfolio of long-life, low-cost oil and gas assets.

“The merged company would have strong cash generation from a diverse range of assets which provides a strong platform for sustainable growth and continued shareholder returns.

“The merger also builds on our industry-leading approach to ESG through the combination of Santos’ net-zero 2040 pathway, including its sector-leading CCS projects, and Oil Search’s unique social programs in PNG, underpinned by a strong balance sheet to fund the transition to a lower carbon future.

“The Revised Merger Proposal represents an extremely attractive opportunity to deliver compelling value accretion to both Santos and Oil Search shareholders.”

Santos and Oil Search have committed to conduct best endeavours due diligence subject to appropriate confidentiality arrangements over a period of approximately four weeks with the aim of entering into a Merger Implementation Agreement, which would contain conditions to completion of the merger such as regulatory approvals.

Each party will be free to declare ordinary dividends in accordance with existing dividend policy through to signing of the Merger Implementation Agreement. Should a party declare a dividend outside its existing dividend policy before the signing of the Merger Implementation Agreement, there would be an appropriate adjustment to the merger ratio.

Citigroup and JB North & Co are acting as financial advisers and Herbert Smith Freehills and Dentons are acting as legal advisers to Santos.

About Santos

Santos’ corporate purpose is to provide sustainable returns for our shareholders by supplying reliable, affordable and cleaner energy to improve the lives of people in Australia and Asia.
Santos has a clear and consistent strategic framework of Transform Build Grow to deliver this vision. At the heart of this framework is a disciplined low-cost operating model that drives decisions around capital allocation and enables sustainable growth and development throughout the cycle.
Santos has been a committed participant in PNG for over 40 years and enjoys a strong working relationship with the PNG Government and its PNG LNG joint venture partners ExxonMobil, JX Nippon, Kumul, MRDC and Oil Search. Santos is supportive of the backfill and expansion of PNG LNG through the development of the P’nyang field and other opportunities. Santos also has a strong working relationship with Total through the GLNG joint venture.
Our strategic vision complements Oil Search’s disciplined three phase strategy to Focus, Deliver and Evolve. We are completely aligned regarding the need for a low-cost base and capital efficiency. We share the same aspirations for the delivery of the LNG expansion in PNG. In relation to Alaska, we would be supportive of Oil Search working towards FEED and FID as publicly announced. We are committed to ESG and measurable action on sustainability.

About Oil Search

Oil Search is a responsible energy company, with a proud history and strong heritage, that contributes to a sustainable future. Established in 1929, the organisation’s purpose is to deliver low cost, high value energy that meets society’s needs, and its ambition is to be the preferred energy company for all stakeholders.
With activities well supported by a clear hierarchy for allocating capital, prioritising sustaining capital and a strong, flexible balance sheet, Oil Search is a safe, low-cost, reliable business with a clear path to future growth.
Recognised for its proven capability to operate in challenging environments, Oil Search has a world-class resource base and a strong track record of working with communities and stakeholders. Sustainability is embedded across the Company and it aspires to set the standard for sustainable development.


Origine : Communiqué Santos

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