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XRG Consortium withdraws offer to acquire 100% of Santos shares
Kay Cashman Petroleum News
The non-binding, indicative proposal announced on June 16 by a consortium led by XRG P.J.S.C., a subsidiary of Abu Dhabi National Oil Company and including Abu Dhabi Development Holding Company and Carlyle (the XRG Consortium), to acquire 100% of the issued shares of Santos Limited via a cash scheme has been withdrawn by the consortium.
On Sept. 15, the Santos Board advised the XRG Consortium that Santos expected to enter into a SIA (binding scheme implementation agreement) at the agreed offer price of US$5.626 if a binding proposal was received from the XRG Consortium on acceptable terms on or prior to Sept. 19.
In response the XRG Consortium notified the Santos Board of its decision to withdraw its proposal and not proceed with the transaction.
The XRG Consortium said it had not found anything in due diligence that would lead it to withdraw its indicative proposal.
The consortium confirmed that it maintains a positive view of the Santos business and has respect for the management team.
The Santos Board had expressed its concern to the XRG Consortium about delays in agreeing to the SIA. The consortium would not agree to acceptable terms that protected the value of the potential transaction for Santos shareholders, Santos said.
Further, under the SIA the XRG Consortium would not agree to an appropriate allocation of risk between it and Santos shareholders. This included the obligation of the consortium to secure regulatory approvals and the provision of a reasonable commitment to the development and supply of domestic gas.
Pikka Phase 1 On Aug. 27, Santos hosted a live webcast providing an overview of its half-year 2025 results.
Led by Santos Managing Director and CEO Kevin Gallagher, the webcast revealed the latest news about the Pikka Phase 1 development in northern Alaska, including the fact it was 91% complete and that production was expected to be 80,000 barrels of oil per day..
Gallagher said the project was "progressing well" and that Santos has brought first oil guidance forward from mid-2026 to first quarter 2026, with the ramp-up to plateau expected in the second quarter.
"This is another outstanding example of Santos' self-execution project delivery model in action," Gallagher said. "The pipeline was completed a year ahead of schedule and the challenging logistics of river-lifting key processing modules from Canada and barging the seawater treatment plant from Indonesia have been executed flawlessly. "
Combination wells together with "deployment of other innovative drilling technologies and techniques are delivering real cost savings and faster job completion times," Gallagher said.
"This represents a significant value upside opportunity for future developments in Alaska," Gallagher said.
Six wells have been "flowed back" in 2025, including three producers, bringing average expected flow rates per well to 7,000 barrels per day at start-up, Santos said Aug. 27.
Spence speaks On Sept. 17, Santos Chair Keith Spence said: "Our two major development projects, Barossa and Pikka phase 1, are well advanced and materially de-risked through our proven self-execute capability, positioning Santos for around a 30% increase in production by 2027.
"As these projects come online, Santos' capacity to generate free cash flow will materially strengthen, supporting greater returns to shareholders under our capital allocation framework."
-KAY CASHMAN
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