Santos Acquires Quadrant Energy in $2.15 Billion Deal

Santos, August 24, 2018

Santos Ltd has acquired 100% of Quadrant Energy (Quadrant) for US$2.15 billion, plus potential contingent payments related to the Bedout Basin. The acquisition of Quadrant is fully aligned with Santos’ growth strategy to build on existing infrastructure positions around the company’s core assets. 

Quadrant delivers operatorship of Santos’ existing gas hubs in WA, providing flexibility to optimise operations and position Santos to capture value from backfill and third party gas opportunities. It also strengthens Santos’ offshore operating expertise and capabilities to drive future growth opportunities across offshore WA and northern Australia. Quadrant’s portfolio of high-margin conventional domestic natural gas assets backed by medium to long-term CPI-linked offtake contracts provide strong and stable cash flows, and compliment Santos’ predominantly oil-linked revenues.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said Santos 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.

The acquisition will have an effective date of 1 January 2018. Completion is expected by the end of 2018 and is subject to customary consents and regulatory approvals.


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