Santos Steps Away from Abu Dhabi Agreement
In a significant development, Australian energy company Santos has announced its ambitious plans for production growth and the recent takeover proposal it received.
The energy giant is currently executing two major development projects, Pikka Phase 1 and Barossa, off Australia's northern shore. These projects, including the Pikka Project, an Australian endeavor, are expected to contribute to a 30 percent increase in Santos' production by 2027, according to the company's estimates. This increase is largely due to the online commencement of Barossa and Pikka Phase 1.
Santos' Board Chair, Keith Spence, has stated that the strategy is to generate cash, reward shareholders, reinvest, and grow production. The company anticipates first oil from Pikka Phase 1 in the first quarter of 2026. Unit production cost is expected to trend lower over time for Santos, a testament to their commitment to safe and reliable operations.
However, a proposed takeover of Santos for $5.76 per share in cash was put forward by a consortium led by Abu Dhabi National Oil Company on June 16. The XRG consortium, another potential buyer, had initially expressed a positive view of Santos' business and respect for its management team. They requested an extension to the due diligence period.
The Santos board, however, had concerns about the XRG consortium delaying the agreement and not agreeing to terms that protected value for Santos shareholders. As a result, they advised the XRG consortium that they expected to enter into an implementation agreement for $5.626 per share if a binding proposal was received on acceptable terms.
On September 19, the XRG consortium notified Santos that they would not proceed with the transaction. The Santos stock started the day at $5.19 per share and dropped to $4.75 by the end of trading after the decision.
The expected production increase and cost trend improvements are part of Santos' strategy to operate safely and reliably, positioning the company for continued growth in the future.
Read also:
- Trump administration faces lawsuit by Denmark's Ørsted over halted wind farm project
- U.S. takes a pledge of $75 million to foster Ukrainian resources development
- Unchecked Management of HP Dams Leads to Environmental Disaster: RTI Reveals
- Political Rivalry: Comparison of Labour and Conservative Parties' Policies and Their Current Standings in Polls
