This announcement followed one month of reciprocal confirmatory due diligence, which began on 6 August 2021, with terms agreed upon last month.
Upon completion, the new company’s projected revenue will be $21 billion.
Under the terms of the merger, Oil Search shareholders will receive 0.6275 new Santos shares each for Oil Search shares held on the date of the arrangement.
Shares will be divided with Oil Search shareholders owning around 38.5 per cent of the merged entity and Santos shareholders owning 61.5 per cent.
Santos CEO and to-be CEO of the merged entity Kevin Gallagher announced last week that thanks to strong cashflows, the companies can increase fund investments in fuels of the future.
Oil Search Chairman Rick Lee said the merger provided Oil Search with an opportunity to participate in a larger entity with greater diversity and access to capital.
“The combined entity will have the capacity to deliver on an exciting pipeline of organic growth opportunities,” Mr Lee said.
Santos Chairman Keith Spence added that the merged entity was well positioned for success in a new era of oil and gas.
“The merger represents an attractive combination of two industry leaders to create a regional champion of quality, size and scale with a unique and diversified portfolio of long-life, low-cost oil and gas assets,” said Mr Spence.
The Papua New Guinea government still holds a veto power over the deal; although, according to Credit Suisse energy analyst Saul Kavonic, withholding approvals seems unlikely.
Santos’ first PNG court hearing will be held on 27 October.
The merger will be effective from 2 December 2021.
For more information visit the Santos website.