Oil and gas giant Santos plans to sell several of its Asian assets to British production and exploration company Ophir Energy for $US221 million.
The sale is consistent with Santos’ strategy to realise value from its late-life non-core assets and will result in Santos making country exits from Vietnam, Indonesia, Malaysia and Bangladesh.
The assets sold to Ophir include:
• 31.875% in the Block 12W PSC (Chim Sáo and Dua oil fields), Vietnam;
• 67.5% in the Madura Offshore PSC (Maleo and Peluang gas fields), Indonesia;
• 45% in the Sampang PSC (Oyong and Wortel gas fields), Indonesia;
• 20% in the Deepwater Block R PSC (Bestari oil discovery), Malaysia;
• 45% in the SS-11 PSC, Bangladesh;
• 50% in Block 123 PSC and 40% in Block 124 PSC, Vietnam.
All Santos employees associated with these assets will transfer to Ophir as part of the sale.
The producing assets sold are relatively late-life and are not prioritised for capital in the Santos portfolio. Santos’ share of production from the assets in the first quarter of 2018 was 1.4 million barrels of oil equivalent.
Santos Managing Director and Chief Executive Officer Kevin Gallagher said that the sale of the Asian assets delivers on Santos’ undertaking to simplify the business and focus on the company’s five core long-life natural gas assets in Australia and Papua New Guinea.
“We have always believed the Asian assets are a quality portfolio and are pleased to achieve an attractive outcome for our shareholders. Santos will work with Ophir to ensure a smooth transition, including the transfer of all the Santos employees to Ophir”, said Mr Gallagher.
Proceeds from the sale will be applied to further reduce Santos’ net debt, which stood at
US$2.5 billion at the end of March 2018.