Santos has just announced that they have finalised a full acquisition of Quadrant Energy (Quadrant) for US$2.15 billion in cash plus potential contingent payments related to the Bedout Basin project.
The acquisition was fully funded from existing cash resources and new committed debt facilities, with rapid de-gearing expected to be less than 30 per cent by the end of 2019. According to Santos, the take-over was consistent with their growth strategy of building on existing infrastructure positions around core assets to deliver sustainable shareholder returns, further driving their ‘aim to be Australia’s leading domestic natural gas supplier’.
Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher, commented on the recent announcement, stating that Santos has enjoyed a long-established relationship with Quadrant which has operated its WA natural gas assets for many years developing a well-deserved reputation as a safe, high reliability and low-cost operator.
“This acquisition delivers increased ownership and operatorship of a high-quality portfolio of low cost, long-life conventional Western Australian natural gas assets which are well known to Santos, and importantly significantly strengthens Santos’ offshore operating capability,” he said.
“The transaction lowers our proforma 2018 forecast free cash flow breakeven oil price by a further $4/bbl and Quadrant’s stable cash flows provide increased certainty during the upcoming period of major growth project delivery,” Mr Gallagher conversed, “we look forward to welcoming Quadrant’s staff to the Santos family and integrating our Western Australian operations.”
Quadrant held natural gas and oil production, in near and medium-term development, appraisal and exploration assets across more than 52,000 square kilometres of offshore acreage, predominantly in the Carnarvon Basin, Australia’s largest offshore oil and natural gas province.
Quadrant’s Chief Executive Officer, Brett Darley said he was extremely proud of the whole team at Quadrant Energy who over the past three years, have transformed Quadrant into a highly successful stand-alone business.
“We have delivered operational excellence, outstanding results in our exploration program and successfully integrated an entirely new business model throughout the company. All of this has been achieved with a strong focus on the environment, and the commitment to the health and safety of our people,” Mr Darley said.
“On behalf of Quadrant Energy, I would like to say how pleased I am to be part of this agreement with Santos and our business and people are well placed for this exciting new chapter as part of a national and international oil and gas production.”
More information on this announcement can be found here.
