Santos has announced the completion of the acquisition of West Australian-based oil and gas company Quadrant Energy for $2.15bn.
For the acquisition, Santos paid an amount of $1.93bn, which consists of purchase price, excluding completion adjustments and cash acquired. The amount was arranged from Santos’ existing cash resources and $1.2bn of new debt facilities.
Santos managing director and CEO Kevin Gallagher said: “The acquisition of Quadrant is value accretive for Santos shareholders and is consistent with our strategy to build and grow our core assets around existing infrastructure and become Australia’s leading domestic natural gas supplier.
“Santos has now increased its ownership and become the operator of a high quality portfolio of low cost, long-life conventional Western Australian natural gas assets with stable cash flows. Santos knows these assets well and has enjoyed a long-established relationship with Quadrant, which has operated our WA natural gas assets for many years.”
For this merger, UBS and JB North & Co served as financial advisers and Herbert Smith Freehills acted as legal advisers to Santos. The merger of Quadrant is fully associated with Santos’ growth strategy to build on existing infrastructure positions around the company’s core assets.
Recently, the acquisition was approved by the Australian Competition and Consumer Commission (ACCC). The competition watchdog said that the deal would unlikely to hurt competition. The deal was announced in August this year.
The acquisition is expected to allow Santos to leverage Quadrant’s offshore operating capability across its Western Australia and Northern Australia portfolio.
Primarily located in the Carnarvon Basin offshore Western Australia, Quadrant’s assets include natural gas and oil production, near and medium term development, appraisal and exploration assets across more than 52,000 km2 of acreage.
In 2017, the company’s share of production from the assets was 19 million barrels of oil equivalent (mmboe). The acquisition is expected to increase Santos’ 2P reserves by nearly 26% to 220 mmboe.