In total, Santos paid US$1.93 billion to acquire the prominent energy producer.

Australian energy producer Santos (ASX:STO) has completed its purchase of private oil and gas company Quadrant Energy.

In total, Santos paid US$1.93 billion to acquire the prominent energy producer.

As quoted from the press release:

The completion amount was fully funded from Santos’ existing cash resources and US$1.2 billion of new debt facilities.

Stronger operating performance and free cash flow generation since 30 June means Santos is now expecting gearing to be approximately 33 percent at year-end.

Santos managing director and CEO Kevin Gallagher said: “The acquisition of Quadrant is value accretive for Santos shareholders and is consistent with our strategy to build and grow our core assets around existing infrastructure and become Australia’s leading domestic natural gas supplier. Santos has now increased its ownership and become the operator of a high quality portfolio of low cost, long-life conventional Western Australian natural gas assets with stable cash flows.”

“Santos knows these assets well and has enjoyed a long-established relationship with Quadrant, which has operated our WA natural gas assets for many years.”

“A key benefit of the transaction is the diversification of the Santos revenue base to include strong operating cash flow from long-term CPI-linked gas supply contracts at a time when the oil price continues to be volatile.”

“The Quadrant acquisition lowers our forecast 2018 proforma free cash flow breakeven oil price to approximately US$32 per barrel.”

Click here to read the full announcement

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