Australian energy company Santos announced Wednesday it completed a $2.15 billion acquisition of natural gas operator Quadrant Energy.
"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." Santos Managing Director and Chief Executive Officer Kevin Gallagher said in a statement.
Santos said the amount of reserves acquired in the transaction makes it one of the largest natural gas suppliers in Australia. Santos, alongside French supermajor Total and Australian energy company Melbana, already has a role in the Beehive prospect off the coast of Australia.
Seismic surveys used to get a better understanding of a field's potential are under way and, according to Melbana, Beehive could be one of the largest untapped basins in the country. Santos and Total have the option to take an 80 percent participating interest in a permit that Melbana says may be a "multibillion-barrel" prospect.
Santos noted that the license area in question is either next to or within reach of nearby production infrastructure, so Beehive has the potential to enter commercial operations quickly if an actual discovery is made.
The Australian company said many of the natural gas assets held by Quadrant, meanwhile, overlap what's in its portfolio, giving it a chance to increase its reserve capacity by 26 percent and its production potential by 32 percent.
Subject to the approval of Australian anti-trust authorities, Quadrant confirmed Wednesday that its shareholders agreed to the sale of 100 percent of their interests to Santos.
The announcement came two days after Quadrant and Carnarvon Petroleum announced surprise results of a drilling operation at its so-called Phoenix blocks off the coast of Western Australia state. At its first well, dubbed Dorado, the joint venture partners announced they ran through a 393-foot column of oil while searching for natural gas.
That would quantify as a major oil discovery, with initial estimates of 150 million barrels of commercial prospects possible. On Monday, Carnarvon Managing Director and CEO Adrian Cook said the best estimate now was 171 million barrels of oil at Dorado.
"Oil fields of this significant scale are not often found, with the last large field discovery on the North West Shelf being around 30 years ago," he said in a statement.
