Santos has bought out Western Australian company Quadrant Energy in a deal worth almost $3 billion

SANTOS has made a $US2.15 billion acquisition, buying Western Australian gas producer Quadrant Energy.

SANTOS has made a $US2.15 billion acquisition, buying Western Australian gas producer Quadrant Energy.

The Adelaide company said the buyout would be funded from cash and new debt, but the company would rapidly pay down that debt.

Quadrant’s website says the company accounted for 22 per cent of WA’s gas supply in 2017.

The company’s main focus are the Exmouth and Carnarvon basins off the WA coast.

Quadrant is owned by Brookfield Asset Management and Macquarie Capital.

Santos managing director 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,’’ he said.

“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 break-even oil price by a further $4 per barrel 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.’’

Santos itself rejected a takeover earlier this year, rebuffing harbour Energy’s $7 per share bid.

Santos stock closed at $6.27 yesterday.

[e-mail]