According to a market statement, Santos Ltd and Oil Search PNG Ltd have completed their merger through a merger implementation deed.
Reciprocal confirmatory due diligence, which began on August 6, has been completed.
Oil Search shareholders will get 0.6275 per cent new Santos shares for each Oil Search share held on the plan of arrangement's record date, according to the conditions of the merger.
Around 38.5 per cent of the combined company will be owned by Oil Search stockholders.
Santos stockholders will own around 61.5 per cent of the company.
The board of directors of Oil Search unanimously recommended that shareholders vote in favour of the merger.
Each director of Oil Search plans to vote in favour of the merger with all of the shares in Oil Search that they own or control.
According to Santos, the merger of Santos and Oil Search will result in a regional champion with the following characteristics:
- A diversified portfolio of high-quality, long-life, low-cost assets with significant growth potential in Australia, Timor-Leste, Papua New Guinea, and North America;
- The pro-forma market capitalization of roughly US$21 billion (K53 billion), putting the combined company among the top 20 ASX-listed firms and the top 20 global oil and gas companies;
- Production of around 116 million barrels of oil equivalent in 2021;
- 4,867 million barrels of oil equivalent PRO-forma 2P+2C resource base;
- An investment-grade balance sheet with over us$5.5 billion in liquidity to self-fund development projects while maintaining additional options and flexibility to optimize the portfolio
- Gearing of less than 30% is the goal; and
- Santos' net-zero emissions aim by 2040, a focus on carbon capture and storage projects, and Oil Search's social and community involvement in PNG and North America are all strong ESG credentials.
Oil Search chairman Rick Lee said, “Put simply, this merger provides Oil Search shareholders with a compelling opportunity to participate in a larger entity with significant scale, product mix, ESG and geographic diversity, and access to capital.
“The combined entity will have the capacity to deliver on an exciting pipeline of organic growth opportunities.”
Santos Chairman Keith Spence said, “The merger represents an attractive combination of two industry leaders to create a regional champion of quality, size and scale with a unique and diversified portfolio of long-life, low-cost oil and gas assets.”
Reference: Pacific Mining Watch (13 September 2021). “Santos, Oil Search seal deal”.
