Macquarie takes Santos gas stake, pursues Central Petroleum

Macquarie continues to eye a closer relationship with Central Petroleum, claiming a half-stake in the Mereenie field.

Central Petroleum managing director Richard Cottee.

Macquarie Group continues to eye a closer relationship with oil and gas minnow Central Petroleum, claiming a 50 per cent stake in the Mereenie oil and gas field west of Alice Springs from Santos.

Macquarie will split ownership with operator Central Petroleum, a company the investment bank made a failed bid for last month.

For Santos, meanwhile, it marks a quick retreat from the project after it hived off 50 per cent to Central Petroleum in June last year for $45 million upfront.

Santos has been looking to shed its non-core assets over the past year, with the activity this month culminating in a shake-up of the company, which will hive off its five core assets.

Macquarie’s entry price is unclear, but the move highlights its interest in assets held by Central Petroleum as it undertakes due diligence on the group.

Macquarie already has a 2.3 per cent holding in the Richard Cottee-led junior and also serves as its chief financier.

It launched a 17.5c a share bid for control of the company on November 14, and while that offer was rejected, Mr Cottee left the door open to improved terms. “The board has determined that the proposal is not in the best interests of shareholders,” he said in a statement.

“In the circumstances, the board considers it appropriate to grant due diligence access, subject to appropriate documentation, to provide Macquarie every opportunity to reconsider its proposal.”

The initial offer represented a valuation of $75.8 million.

Central Petroleum has long drawn media attention because of its grand energy ambitions in the Northern Territory, with the appointment of high-profile executive Mr Cottee in 2012 intensifying the focus.

Mr Cottee gained fame for leading Queensland Gas from a minnow to an eventual sale to BG Group for $5.7 billion in 2008.