PNG securities commission approves Santos, Oil Search merger

Santos on December 6 announced it had received the necessary approval letter and exemption notice from the Securities Commission of Papua New Guinea (PNG) in order to implement the proposed merger with Oil Search.

“The condition set out in clause 3.1(d) of the Merger Implementation Deed released to ASX [Australian Securities Exchange] on 10 September 2021 has now been satisfied,” it said.

Oil Search in a separate statement said that the merger remains subject to certain conditions, including approval from the Independent Consumer and Competition Commission of Papua New Guinea. The merger also needs the approval of Oil Search shareholders at the scheme meeting to be held on December 7; court approval and the satisfaction or waiver of certain other customary conditions.

Oil Search said it continues to unanimously recommend that its shareholders vote in favour of the merger in the absence of a superior proposal. After the completion of the deal, Oil Search shareholders will own approximately 38.5% of the merged entity and Santos shareholders will own about 61.5%.

The combined entity will be among the world’s top 20 oil and gas companies and have assets across Australia, Timor-Leste, PNG and North America. It will have production of about 116mn barrels of oil equivalent (boe)/year based on 2021 output, and reserves and resources of 4.87bn boe. Santos expects the merger to unlock pre-tax synergies of $90-115mn/year.