Two bidders in data room for Santos-backed Alaska project, as Beach Energy weighs options across the Tasman

Two high profile oil and gas investors are understood to be battling it out for a 10 per cent stake in the Pikka project in Alaska, jointly owned by Santos and Repsol, say sources.

Two high profile oil and gas investors are understood to be battling it out for a 10 per cent stake in the Pikka project in Alaska, jointly owned by Santos and Repsol, say sources.

Advisory firm Moelis has been working on the sale, and it is understood that two parties have been in a data room carrying out work on the asset for about a month.

The bidders are believed to be high profile names.

Earlier, the suggestion was that groups such as ConocoPhillips, Exxon or Chevron could be interested.

Santos had hired Moelis to work on the sale at least 18 months ago after inheriting the asset in a $21bn merger with Oil Search in 2021.

But work on a divestment was paused while it explored a potential merger with Australian listed rival Woodside at the end of last year.

Santos owns a 51 per cent interest in Pikka and Repsol owns the remainder, and both owners had earlier been hoping to reduce their interests by about 15 per cent.

The project was earlier estimated to be worth between $US1.5bn and $US2bn, but now may be worth far more on the back of the rising oil price.

The expectation in 2022 was that Santos would look to sell down about 10 or 15 per cent in the asset.

It comes as Santos presents to the Macquarie Australia Conference on Thursday, when some suspect it may outline expansion plans for its LNG assets, potentially those in PNG.

Some shareholders have been lobbying for a demerger of its LNG operations to gain more share price upside.

Meanwhile, the recently appointed boss of Santos rival Beach Energy, Brett Woods, presented at the Macquarie Australia Conference in Sydney on Wednesday.

He said the company would be positioned to consolidate the east and west coast oil and gas markets once it had streamlined the business and stripped out costs.

Mr Woods is a former Santos executive who comes to the role highly regarded and is understood to have been sought for the role by Beach’s 30 per cent shareholder Seven Group Holdings, controlled by Kerry and Ryan Stokes, for some time.

Mr Woods indicated that he would be open to a sale of its operations in New Zealand that were non-core to its business, if a buyer at the right price emerged.

He told DataRoom after his presentation that the east and west coast of Australia were the company’s key areas of focus and he would reinvest in those markets.

However, there were a number of assets for sale in that market and not buyers yet willing to pay top dollar, but there was no urgency to sell as energy supply remained scarce there with the large take-up of electric vehicles and the assets were performing well.

He outlined in his presentation that the deterrent for investing further surrounded government uncertainty across the Tasman surrounding oil and gas exploration.

This was after the former Prime Minster Jacinda Ardern banned new oil and gas exploration, and he said that there was a polarised view in the current National-led government coalition on policy.

Beach Energy inherited the Kupe gas project in New Zealand business through the acquisition of Lattice Energy from Origin Energy in 2017 for $1.6bn.

Mr Woods has finalised a strategic review of Beach Energy and will present findings to the market in June once signed off by the board.

As part of the review, he has reduced the company’s headcount by 21 per cent in a quest to ensure its cost base was lower than larger rivals Woodside and Santos.

He said that the Perth Basin needed some form of consolidation, and there was value in doing so.

In terms of parties that could take part in the domestic consolidation of the Australia east and west coast oil and gas markets are Cooper Energy, Hancock Prospecting, Strike Energy and Santos, which could be subject to a break up.