Good to hear Morton and Battersby have been enjoying a few yum cha's. Hopefully with Sinopec. I also hear rumurs of DM and DB being contacted by Santos. But I am sure they are just rumours and should be given the appropriate weight.
But can someone explain why Santos, as part of GLNG, does not have the money to bid for Santos?
Santos, Kogas, Petronas and Total can all bid for ESG as the GLNG syndicate. Similar but involving more parties than the Arrow bid.
Santos begins with 35% of the resource, and has 19.99% of ESG. It makes sense for the GLNG JV partners to end up with the same percentage share of PEL 238 as their current ownership of GLNG. So Santos to end up with 30% of the lot, Petronas 27.5%, Total 27.5% and Kogas 15%.
So Santos sells down 5% of PEL 238 (to align with their 30% stake in GLNG) to the GLNG JV and the other parties bid on ESG according to their relative GLNG holdings. And Santos sells down their ESG shares TO THE JV, because Santos already owns 35% of PEL 238 anyway.
Santos would be a seller of both ESG and a seller of part of PEL 238. GLNG is the buyer.
Rather than it costing Santos extra money, it is the other GLNG partners who are the ones putting their hands in their pockets.
It doesn't cost Santos a cent. No out of pocket expenses whatsoever.
There have been ambit claims on here that 'Santos cannot afford to bid'. Can someone please explain why the above GLNG JV acquisition of ESG is unaffordable for Santos? How does this affect their credit rating? They are monetising part of their Gunnedah assets, reducing the risk to the GLNG project whilst increasing its potential for future offtakes.
Yaq
ESG Price at posting:
87.0¢ Sentiment: Buy Disclosure: Held
