AS expected, a string of drilling successes off the WA coast has attracted a big suitor to Quadrant Energy, with Santos announcing it will pay US$2.15 billion to acquire 100% of the company a month after it made the huge Dorado oil discovery.
Santos managing director and CEO, Kevin Gallagher, said the company has enjoyed a long-established relationship with Quadrant which has operated its WA natural gas assets for many years developing a well-deserved reputation as a safe, high reliability and low cost operator.
“This acquisition delivers increased ownership and operatorship of a high quality portfolio of low cost, long-life conventional Western Australian natural gas assets which are well known to Santos, and importantly significantly strengthens Santos’ offshore operating capability.”
“It is materially value accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier.”
“The transaction lowers our proforma 2018 forecast free cash flow breakeven oil price by a further $4/bbl and Quadrant’s stable cash flows provide increased certainty during the upcoming period of major growth project delivery.”
“We look forward to welcoming Quadrant’s staff to the Santos family and integrating our Western Australian operations,” Mr Gallagher said.
Quadrant’s portfolio also includes a large inventory of discovered resources to backfill existing infrastructure and a leading position in the highly prospective Bedout Basin, including the recent significant oil discovery at Dorado (Quadrant 80%) which provides near-term development opportunity and unlocks material exploration potential.
Santos said the acquisition is fully funded from existing cash resources and US$1.2 billion in new committed debt facilities. Santos had US$1.5 billion in cash on hand as at 30 June 2018.
The new committed debt facilities comprise a US$600 million five and a half-year bank term loan facility and a US$600 million two-year bridge facility. It is intended that the bridge facility will be refinanced post-completion of the acquisition.