Page 12 - AsianOil Week 21

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Santos completes acquisition of ConocoPhillips’ gas assets
FINANCE & INVESTMENT
AUSTRALIAN independent Santos has com- pleted its acquisition of US super-major Cono- coPhillips’ northern Australia and Timor-Leste assets for a reduced upfront price.
Santos said on May 28 that it had paid a lower upfront figure of $1.265bn in exchange for increasing a contingent pay- ment, which is subject to a final investment decision (FID) on the Barossa natural gas project offshore the Northern Territory, to $200mn. The independent agreed to a $1.39bn upfront payment and $75mn con- tingent payment in October 2019.
Santos will now take over ConocoPhillips’s 56.9% stakes in the Darwin liquefied natural gas (LNG) export terminal and Bayu-Undan feed gas project, a 37.5% stake in Barossa and a 40% interest in Poseidon. Barossa is the lead candi- date to backfill Darwin LNG once Bayu-Undan, which is located 500 km north-west of Darwin in Timor-Leste waters runs dry. ConocoPhillips has projected that Bayu-Undan will enter end of life status in 2022.
Santos said its net settlement payment was $655mn, lower than a previously forecast
$800mn. The deal had an effective sale date of January 1, meaning that ConocoPhillips’ share of project profits from that point went towards lowering the final settlement amount.
Santos’ stake in Bayu-Undan and Darwin LNG climbs to 68.4% stake, while its stake in Barossa now stands at 62.5%.
Santos agreed to sell a 12.5% stake in Barossa to Japan’s JERA in April. JERA already has a 6.1% interest in the Darwin LNG termi- nal. The Australian developer also agreed to sell a 25% stake in Darwin LNG and Bayu-Un- dan to South Korea’s SK E&S for $390mn in March. The sale of the interests is subject to third-party consents, regulatory approvals and Barossa reaching FID.
Santos managing director and CEO Kevin Gallagher said: “We are continuing to advance discussions with other parties for the sale of further equity in the Barossa project in line with our previously stated target ownership level of around 40% to achieve increased part- ner alignment and prudent future allocation of growth capital. We are also in discussions with buyers for Barossa LNG volumes.”™
Oilex finds new buyer for Australian assets
FINANCE & INVESTMENT
AUSTRALIAN junior Oilex has found another buyer for its interests in the Cooper-Eromanga Basin after its first deal fell through in April.
Armour Energy said on May 28 that it had entered into a conditional binding term sheet to acquire a 79.33% interest in petroleum explora- tion licences (PELs) 112 and 144, which cover 1,086 square km and 1,166 square km respec- tively, as well as an option to acquire the remain- ing 20.66% interest in each. Oilex secured the option in August 2019 when it agreed to acquire an additional 51.5% interest in the licences from Perseville Investing and Terra Nova Energy.
Armour will also acquire a 100% interest in 27 petroleum retention licences (PRLs) covering 2,445 square km, which includes 792 square km of 3D seismic, by assuming Oilex’s obligations under existing arrangements with Senex Energy. Armour will pay AUD1 ($0.67) for each PRL and will assume existing abandonment liabilities and the replacement of AUD1.2m ($798,000) in ten- ement bonds with the South Australian state government. Senex will retain a 20% back-in right at a cost to be determined following the drilling of a well.
Armour has agreed to issue 24.5-34.5m shares to Oilex, with the final tranche being subject to the volume-weighted average price (VWAP) of Armour’s shares over the 90 days from the term sheet’s execution.
Armour said the variance was designed to deliver a closing consideration of AUD906,500 ($603,000) in shares to Oilex. This will leave Oilex holding 4-5.5% of Armour’s issued share capital after the deal, which is still subject to due diligence, has been completed.
Armour said the share issue would be subject to shareholder and regulatory approvals, with the shares themselves also subject to a 12-month voluntary escrow.
Oilex had originally agreed to sell its Austral- ian assets to UK-based Doriemus, but the deal fell through after the latter withdrew its pro- posed capital raising.
The deal was subject to Doriemus success- fully raising at least AUD3.5mn ($2.3mn), but the company said in March that it would not proceed with the capital raising after certain investors failed to settle their committed funds pursuant to their subscription agreements.™
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