Santos completes Victorian gas assets sale

Australia’s Santos has completed the sale of all Victorian gas assets offshore Australia, except for the 10 pct interest in the Minerva asset, to compatriot Cooper Energy. 

Santos agreed to sell its Victorian assets to Cooper Energy for cash consideration of up to A$82 million ($60.4 million in current exchange rate) in October 2016.

This means that Santos sold all of its remaining Victorian assets since it previously sold its interest in the Kipper gas field for A$520 million in March 2016.

Cooper Energy said on Tuesday it paid an initial consideration of A$61 million plus working capital adjustments to Santos with a subsequent conditional consideration of A$20 million payable on the earlier of the Final Investment Decision for the Sole Gas Project or a sell-down by Cooper Energy of interest in the Victorian gas assets.

The assets acquired include interests in producing gas assets, gas projects and plant in the Otway and Gippsland Basins.

Namely, the deal entails a 50 percent interest in the producing Casino-Henry gas project, a 50 percent interest in retention licenses VIC/RL11 and VIC/RL12, and a 50 percent interest in the VIC/P44 exploration acreage, all three in the offshore Otway Basin.

The deal also entails a 50 percent interest in the Sole Gas Project and a 50 percent interest in the Orbost Gas Plant taking Cooper Energy to 100 percent ownership of both assets. The third Gippsland Basin asset included in the deal is 100 percent interest in the depleted Patricia-Baleen gas field.

According to Cooper, the acquisition is effective from January 1, 2017.

The company expects that the outstanding conditions precedent, not including pre-emptive rights, for the acquisition of a 10 percent interest in the Minerva Gas Project would be satisfied in due course at which point Cooper Energy will pay a consideration of A$1 million.

The Minerva gas field is expected to cease operation in the 2017 calendar year, and production from Minerva should contribute 0.1 million boe of the 1.6 million boe production forecast for the company in the current calendar year.

Also, the process for the transfer of operatorship of Casino-Henry (VIC/L24 and VIC/L30); VIC/RL11; VIC/RL12; VIC P/44; the Sole Gas Project (VIC/RL3); and Patricia-Baleen (VIC/L21) to Cooper Energy has started. This process, which includes a regulatory review period of at least 90 days, is expected to be completed by mid-2017.

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