Australian oil and gas company Santos said Thursday it has completed the acquisition of ConocoPhillips’ northern Australia assets under a revised deal, Kallanish Energy reports.
The companies agreed to reduce the upfront payment of $1.39 billion to $1.26 billion, while increasing the contingent payment to $200 million from the previous $75 million.
The restructuring of payments reflects the recent market volatility and the deferral of the final investment decision (FID) on the Barossa development project. The total consideration for the assets remained unchanged.
Through the acquisition, Santos said it gained operatorship of “low-cost, long-life gas assets and strategic LNG infrastructure.” Its interest in the Bayu-Undan and Darwin LNG plant is now 68.4%, while the stake at the Barossa project is 62.5%.
“As a foundation partner in Bayu-Undan and Darwin LNG, and an existing partner in Barossa, we know these assets well,” commented Santos CEO Kevin Gallagher. “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 has already agreed to sell a 25% stake in Darwin LNG and Bayu-Undan to SK E&S for $390 million. It also signed a letter of intent to sell a 12.5% interest in Barossa to Jera, which is subject to positive FID on the project.
The plan is for Santos “to build alignment” between the Darwin LNG and Barossa joint ventures, welcoming other parties to the gas project and reducing its ownership to 40%.
ConocoPhillips said in separate statement it will continue its presence in the country through the Australia Pacific LNG project and exploration activities.
The assets sold to Santos produced an average of 46,000 barrels of oil equivalent per day in the first quarter of 2020, Conoco said. Total proved reserves stood at 17 million barrels of oil equivalent at year-end 2019.
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