Drillsearch Signs Deals to Work with Santos in Australia
Santos acquires Drillsearch's 25.8 percent interest in PEL 100 - Santos has agreed to pay $13.7 million (AUD 15 million) in cash for Drillsearch's 25.8 percent share of PEL 100. While the price reflects the strategic value of this permit to Santos, Drillsearch is pleased with this outcome as PEL 100 was a non-core asset obtained by Drillsearch through the recently concluded takeover of Acer Energy.
Santos farm-in to ATP 549P (West block) - Drillsearch currently has an interest of 66.66 percent in ATP 549P W located in South West Queensland in the area known as the Inland-Cook Oil Fairway, due north of the Cook and Cusinier Oil Fields. Santos will farm-in to ATP 549P W by drilling a commitment exploration well and by carrying Drillsearch in relation to this well cost. Santos will earn a 33.33 percent interest in ATP 549P W through this farm-in.
Conditions to the transaction and expected completion
The transactions are conditional upon completion of mutual satisfactory due diligence which is expected to be concluded within approximately eight weeks. Additionally, customary consents and regulatory approvals will also be necessary. Overall, transaction completion is expected to take place by the end of September 2013.
Managing Director's comments
Commenting on the transactions, Drillsearch's Managing Director, Brad Lingo said, "We are delighted to be entering into this series of important transactions with Santos. Santos has long been regarded as the pre-eminent Cooper Basin Operator and for several years, Drillsearch and Santos have enjoyed a strong and constructive relationship and these transactions are a testament to our good working relations with Santos.
Specifically, Santos' role as Operator and Joint Venture partner in the Western Cooper Wet Gas Project will materially accelerate the development of both conventional and unconventional wet gas resources in these permits. Santos brings its technical expertise, capacity to commercialise and access to capital to an appropriately balanced and aligned Joint Venture structure. Other elements of the transactions will provide for Drillsearch balance sheet strengthening and increased oil production potential, both of which we believe are of particular value in the current environment. We feel fortunate to be partnering Santos on this multi-faceted initiative and we look forward to a successful ongoing relationship with Santos."
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