Santos and Oil Search merger is delayed again following the deferment to the first court hearing date by the Papua New Guinean National Court.
The hearing was actually scheduled to commence on October 27 as advised by the two companies, then delayed to Wednesday under the revised schedule from Oil Search.
However, it is now being pushed back again to Thursday on the back of the administrative problem, not due to anything more fundamental that could seriously derail the deal timetable.
The market had expected the full documentation for the transaction, which was proposed in July and firmed up in September, including a report from an independent expert’s report that would assess the value of the deal for Oil Search shareholders, on Wednesday.
The delays will impact the vote by Oil Search shareholders for the deal, which was originally scheduled for November 29. It is now predicted to slip to December, but would still be happening this year.
The merger is projected to make a top-20 global producer of oil and gas. It would have productions in Asia, PNG, and a prospect of an oil project in Alaska.
Still, Santos is generally believed to review ownership of that venture for a potential sale while some Oil Search’s investors have been doubtful regarding the value of the transaction.
Oil Search’s board is scheduled to commission a report on Thursday, regarding its reserves and its low-cost, cash-generative business, which is created by the independent expert’s report.
Under the merger terms, Oil Search shareholders get 0.6275 new Santos shares for each Oil Search share. Upon completion, Oil Search shareholders will own 38.5% of the merged company and Santos shareholders the rest.
