Santos to Buy Quadrant for $2.15bn
Australian oil and gas independent Santos said August 22 it will acquire 100% of a smaller Australian producer Quadrant Energy for US$2.15bn; the buyout will be funded by cash as well as debt.
Santos CEO Kevin Gallagher said Santos has enjoyed a long-established relationship with Quadrant which has operated its Western Australia’s natural gas assets for many years: “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.”
The acquisition will increase Santos’ 2P reserves by 220mn barrels of oil equivalent, up by about 26%, and annual production by 19mn boe, up by about 32%, the company said, adding that the deal will provides combination synergies estimated at US$30-50mn/yr.
Quadrant CEO Brett Darley said August 22 he was extremely proud of the whole team at Quadrant Energy who over the past three years, had transformed it into a highly successful stand-alone business.
Quadrant holds natural gas and oil assets across more than 52,000 km2 of acreage, predominantly in the Carnarvon Basin offshore Western Australia, Australia’s largest offshore oil and natural gas province. Its 2017 share of production from the assets was 19mn boe (52,055 boe/d). Quadrant’s portfolio also includes assets in the Bedout Basin, including the recent significant oil discovery at Dorado. It also said it accounted for 22% of domestic gas production in Western Australia in 2017, making it the state’s largest single domestic gas supplier, as well as a significant proportion of Australia’s oil.
Quadrant is owned directly or indirectly by funds Brookfield (36.2%), Macquarie (21.8%), Wesfarmers (13.2%), AMB Holdings (13.2%), Quebec pension fund CDPQ (12.1%) and Quadrant management (3.4%), according to a statement released Aug.22 by Wesfarmers which added that the deal is subject to Australian Competition and Consumer Commission (ACCC) approval. (The banner photo shows Devil's Creek gasfield. Credit for the photo and map below: Quadrant)
Quadrant's producing assets in Western Australia (credit: the company)