Ann: Santos and ConocoPhillips enter agreement wi, page-2

re: Ann: Santos and ConocoPhillips enter agre... Santos, ConocoPhillips, SK S&E

Santos has once again been named as a likely takeover target as analysts push for industry consolidation in Australia’s emerging LNG sector. Actually, it’s been named twice.

According to The Australian, JP Morgan and Deutsche Bank have both pointed to the $11 billion oil and gas company as one likely to receive attention as big energy players gear up to sell LNG to Asia at healthy prices while North America grapples with a gas glut.

Just yesterday, Santos and joint venture partner ConocoPhillips agreed to sell a minority stake in the Caldita and Barossa offshore gas fields to SK E&S, which is an unlisted arm of South Korea’s SK Group.

Santos said the $US520 million deal for a 37.5 per cent interest in the two fields would allow it to bring the gas to market quicker. As a result, Santos’ stake will fall from 40 per cent to 25 per cent, while ConocoPhillips will be reduced from 60 per cent to 37.5 per cent.

Following the completion of the $US260 million first well, which SK E&S will pay for, of a three well appraisal, the South Koreans will have the option of increasing their stake in the fields to 49.5 per cent for an extra $US60 million. The proceeds would be split 60:40 between Conoco and Santos, as per the original structure.