Page 6 - Oil&Gas-AustralAsia-2015-Issue-5
P. 6

Offers fly as oil price drops ByMarieRYAN

An LNG tanker leaves Curtis Island bound for
South Korea. Image courtesy of Santos

After a year of weak oil global oil prices per cent stake in the Elk-Antelope field, Analysts and observers suggest
mergers and acquisitions are beginning currently being appraised for develop- Woodside would find a better deal with
to take off in Australia’s oil and gas ment to feed the proposed Papua LNG US-listed InterOil, who owns a 36.5 per
industry. Project operated by French major Total. cent stake in Total’s Papua LNG Project
In a sign of a softening marketplace The Elk-Antelope field could hold huge and has a current capex of almost
takeover activity began in September reserves, more than enough to supply US$1.4 billion, however Total has also
when Woodside Petroleum made a play the estimated two-train Papua LNG expressed interest in the US company.
for Papua New Guinea-based Australi- project with a final investment decision
an-listed Oil Search, offering one of its expected in 2017. Australia’s second-largest explorer
own shares for every four Oil Search Oil Search chief executive Peter Botten producer Santos has become the latest
shares in a proposal that was quickly called Woodside’s play for the company company to be caught up in a takeover
refused for being too low. as opportunistic as it grossly under- bid with one of the oil sector’s big-
Oil Search is an attractive acquisition valued the PNG focussed explorer/ gest-ever private equity firms Scepter
due to its 29 per cent stake in the suc- producer and felt Woodside could not Partners making a US$5.09 billion offer
cessful PNG LNG Project operated by offer any kind of asset overlap and very for Santos.
supermajor ExxonMobil, the project so few synergies.
far has exceeded expectations in terms Woodside has made no moves to in- The investment fund has links to the
of being commissioned early and for crease the bid which values Oil Search royal families of Brunei and the United
production, reaching 7.4 mt/year over at around US$5.45 per share, analysts Arab Emirates and offered Santos
the capacity of expected production of have noted the bid could be raised to US$4.90 per share. Analysts speculate
6.9 mt/year. US$6.41 per share if another major was this is a realistic opening bid that may
In addition Oil Search also holds a 22.8 to make an offer. reach as high as US$5.34 per share,
meaning Santos would sell for around
US$5.56 billion.

~continued on page 6

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