Santos-Oil Search merger confirmed

Santos confirmed on Friday that its merger with Oil Search is now effective following the approvals by Oil Search shareholders and the National Court of Papua New Guinea.

The merger creates a regional giant with a market capitalisation of approximately $22 billion.

The new entity would have pro-forma 2021 production of approximately 117 million barrels of oil equivalent (mmboe) and pro-forma 2P+2C resource base of 4,867 mmboe.

Santos said it expects the merger to unlock pre-tax synergies of US$90-115 million per annum.

Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held on the record date of 14 December.

Santos Chairman Keith Spence said: “The merger combines two industry leaders to create a regional champion of quality, size and scale with a unique and diversified portfolio of longlife, low-cost oil and gas assets. We look forward to integrating our businesses to create one high performing team – with a vision of becoming a global leader in the energy transition.”

Santos Managing Director and Chief Executive Officer Kevin Gallagher added: “Santos and Oil Search are stronger together and will have increased scale and capacity to drive a disciplined, low-cost operating model and unrivaled growth opportunities over the next decade. The merger creates a company with strong and diversified cash flows, providing a platform to deliver shareholder returns and successfully navigate the transition to a lower carbon future. Additionally, the merger builds on our industry-leading approach to ESG through the combination of Santos’ leading carbon capture and storage capabilities with Oil Search’s social programs in PNG and North America.”