Oil and gas giant Santos plans to sell several of its Asian assets to British production and exploration company Ophir Energy for $US221 million ($295 million).
The sale is in keeping with Santos’ strategy of increasing value realisation by selling off non-core properties, and as a result of the sale the company will be pulling out of its oil and gas investments in four countries: Indonesia, Malaysia, Vietnam and Bangladesh.
The employees of the interests included in the sale will not lose their jobs and will transfer to Ophir as part of the deal.
In total, Ophir will acquire 31.875 per cent of Block 12W PSC, 50 per cent of Block 123 PSC and 40 per cent of Block 124 PSC in Vietnam; 45 per cent of the Sampang PSC and 67.5 per cent of the Madura Offshore PSC in Indonesia; 45 per cent on the SS-11 PSC in Bangladesh; and 20 per cent of the Deepwater Block R PSC in Malaysia.
One exemption from the sale is Santos’ 50 per cent interest in the North West Natua PSC development in Indonesia, which the company intends to sell separately.
Completion of the deal is expected to take place later this year, subject to approval from shareholders and regulators. Ophir shareholder approval through the London Stock Exchange (LSE) is expected to take place in June. Santos intends to use the funds to help reduce its net debt of $US2.5 billion.
Kevin Gallagher, managing director and chief executive officer of Santos, was pleased with the sale.
“The sale of the Asian assets further delivers on our undertaking to simplify our business and focus on our five core long-life natural gas assets in Australia and Papua New Guinea,” he said.
“We have always believed the Asian assets are a quality portfolio and are pleased to achieve an attractive outcome for our shareholders. Santos will work with Ophir to ensure a smooth transition, including the transfer of all the Santos employees to Ophir.”