SANTOS has completed the acquisition of ConocoPhillips’ entire Northern Australia portfolio, for a cheaper price than first announced thanks to lower oil prices, with the price revised down from US$1.4 billion to $1.25 billion.

However the deal also sees an increased contingent payment of $200 million on sanction of Barossa, up from an original $75 million.

In March Santos announced it was delaying final investment decision on the backfill project given uncertain market conditions. 

Santos would take the US company's Northern Australia portfolio, leaving ConocoPhillips with only its non-operated interest in the Australia Pacific LNG venture in Queensland, which when the October deal was struck it saw as too cash-generative to give up. . 

"At completion, the net settlement amount was US$655 million, lower than the previously forecast amount of US$800 million, comprising the revised firm purchase price of US$1.265 billion less cash in the acquired business from the effective date of 1 January 2019 to completion with customary adjustments," Santos said in a statement. 

"The net settlement amount is before any sell-downs of interests owned by Santos in the acquired assets."

As of today Santos holds a 68.4% interest in the declining Bayu-Undan gas field  and the Darwin LNG it feeds. 

The company also now effectively owns a 62.5% stake in the Barossa project, due to go to DLNG, and Caldita field, a 40% stake in the Poseidon field, and a 50% stake in the Athena field.

It signed a letter of intent to sell down a further 12.5% interest in the Barossa project to Japan's JERA, and has a firm agreement to sell down a 25% stake in Darwin LNG and Bayu-Undan to SK E&S. 

"We are delighted to assume operatorship and continue to progress the Barossa project so that a final investment decision can be made when market conditions permit," Santos chief Kevin Gallagher said. 

"We welcome the ConocoPhillips' Australia-West employees to Santos and look forward to getting on with the process of integrating our two businesses to create one high performing team." 

Source: Energy News Bulletin

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