Santos' Quadrant Buy Gets Regulatory Approval
Australian oil and gas independent Santos said November 16 that country’s competition watchdog has approved its decision to buy Quadrant Energy.
Santos said that “the condition precedent for completion of the acquisition of Quadrant has been satisfied” with the Australian Competition and Consumer Commission (ACCC). The company announced the proposed acquisition of 100% of Quadrant for US$2.15bn in August this year. Completion is expected to occur within weeks, it said.
“The ACCC considers that a combined Santos/Quadrant will continue to face strong competition from a range of suppliers, including large LNG producers such as Chevron and Woodside,” ACCC chair Rod Sims said. "“Most market participants believe the Western Australian domestic gas market is currently oversupplied. While the demand-supply balance could tighten in future, the ACCC considers that the proposed acquisition will not have a significant impact on future gas prices.”
Santos CEO Kevin Gallagher said the Quadrant acquisition delivers increased ownership and operatorship of a high-quality portfolio of low cost, long life conventional Western Australian natural gas assets.
“It is materially value accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier,” he said. “We already have very significant growth projects across our five core assets, and Quadrant’s recent oil discovery at Dorado is another exciting opportunity for us.”
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 in August, adding that the deal will provides combination synergies estimated at US$30-50mn/yr.
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.