27 November 2018
Santos today announced that it has completed the acquisition of Quadrant Energy (Quadrant). The effective date of the transaction is 1 January 2018.
On completion Santos paid an amount of US$1.93 billion, comprising the purchase price of US$2.15 billion less completion adjustments and cash acquired.
The completion amount was fully funded from Santos� existing cash resources and US$1.2 billion of new debt facilities.
Stronger operating performance and free cash flow generation since 30 June means Santos is now expecting gearing to be approximately 33% at year-end.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said: �The acquisition of Quadrant is value accretive for Santos shareholders and is consistent with our strategy to build and grow our core assets around existing infrastructure and become Australia�s leading domestic natural gas supplier.�
�Santos has now increased its ownership and become the operator of a high quality portfolio of low cost, long-life conventional Western Australian natural gas assets with stable cash flows.�
�Santos knows these assets well and has enjoyed a long-established relationship with Quadrant, which has operated our WA natural gas assets for many years.�
�A key benefit of the transaction is the diversification of the Santos revenue base to include strong operating cash flow from long-term CPI-linked gas supply contracts at a time when the oil price continues to be volatile.�
�The Quadrant acquisition lowers our forecast 2018 proforma free cash flow breakeven oil price to approximately $32 per barrel.�
�The portfolio also includes a leading position in the highly prospective Bedout Basin, including the recent significant oil discovery at Dorado.�
�This acquisition strengthens our ability to fund our growth activities in WA, northern Australia and PNG, and the sustainable dividend through the cycle.�
�We look forward to welcoming Quadrant�s staff to Santos and integrating our Western Australian operations,� Mr Gallagher said.
UBS and JB North & Co acted as financial advisers and Herbert Smith Freehills acted as legal advisers to Santos.
To view the ASX release, please click here.
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