Oil Search Limited Sells 25% Stake in Hides Gas Field to Santos Limited

Strategic Insights -

Oil Search Limited, a leading Australian oil and gas company, has announced the sale of a 25% stake in the Hides Gas field in Papua New Guinea to subsidiaries of Santos Limited. The deal, valued at US$55 million, marks a significant strategic move for both companies, with Santos gaining a major interest in the Hides field and Oil Search maintaining a net 27.5% equity in the project. The transaction is subject to Ministerial approval in Papua New Guinea and is expected to be completed soon.

Key Takeaways:

  • Oil Search Limited has sold a 25% stake in the Hides Gas field in Papua New Guinea to subsidiaries of Santos Limited for US$55 million in cash, plus a contingent payment of between US$25 million and US$35 million.
  • The sale maintains Oil Search's net 27.5% equity in the Hides Gas field, with Santos gaining a 25% stake in the whole field.
  • The deal is subject to Ministerial approval in Papua New Guinea and is expected to be completed soon.
  • Oil Search will maintain its 100% ownership of the Hides Gas to Electricity Project.
  • The sale is part of a larger strategy to provide Santos with a major interest in the Hides field, which represents a significant investment for them and strong endorsement of the PNG to Queensland Gas Project.
  • The transaction is also expected to reduce Oil Search's debt and bolster its Balance Sheet.

Statistics:

  • US$55 million: Cash payment to Oil Search Limited for 25% stake in Hides Gas field.
  • 25%: Stake in Hides Gas field sold to subsidiaries of Santos Limited.
  • 27.5%: Net equity in Hides Gas field maintained by Oil Search Limited.
  • 31%: Initial assignment of interest in PDL1 to subsidiaries of Santos Limited.
  • 6%: Effective assignment back to Oil Search on development of new project at Hides.
  • 21.5%: Remaining interest in Hides Gas field retained by Oil Search Limited.

Sources:

  • Oil Search Limited. "Sale of Equity in Hides Gas Field." Feb 1, 1999.
  • Asia Pulse. "Oil Search to Sell 25% Stake in Hides Gas Field to Santos." Feb 1, 1999.
  • COMTEX News. "Oil Search to Sell Equity Stake in Hides Gas Field." Feb 1, 1999.