Santos Limited to Acquire a 14.3% interest in PRL 3

Australian energy pioneer, Santos Limited (ASX: STO) has 13.5% interest in the PNG LNG Project which is having the capacity to produce over 8 million tonnes of Liquefied natural gas (LNG) per annum. Today the company has announced that it is going to acquire 14.3% interest in Petroleum Retention Licence 3 (PRL 3) which is an important step towards the expansion of PNG LNG plant.

In an announcement made on 16 May 2019, the company announced that PRL 3 Joint Venture participants have signed a binding letter of intent (LOI) with Santos Limited by which Santos will purchase a 14.32% equity interest in PRL 3. With regards to this acquisition, Santos limited has agreed to pay a total of US$187 million.

Today, Santos Limited’s shares were up by 2.104% during the intraday trade.

The signing of this LOI is an important step in creating alignment between the PNG LNG Project and the PRL 3 Joint Venture, ahead of FEED entry for the planned three train expansion at the PNG LNG plant site.

(P’nyang) Equity Interests (Source: Company Reports)

With one of the largest exploration and production acreages in Australia, Santos limited is determined to provide sustainable returns to shareholders by supplying affordable, reliable and cleaner energy to improve the lives of people in Australia and Asia.

Santos along with the other PNG LNG parties and the Papua LNG Joint Venture are continuing discussions to build alignment for the proposed construction of three additional LNG trains at the PNG LNG site, with two trains to process gas from the Papua LNG project and one train for the proposed PNG LNG expansion.

During the first quarter of FY19, PNG LNG performed strongly and LNG plant operated at an annualised rate of 8.8 mtpa achieving record daily rates equivalent to 9.2 mtpa annualised. Further, the Sales volumes were lower than the prior quarter due to the timing of shipments.

On 2 April, the company had announced that the PNG LNG Project co-venturers have entered into a mid-term LNG sale and purchase agreement with Unipec Singapore regarding the supply of around 0.45 million tonnes of liquefied natural gas per annum (mtpa) over a four-year period.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $7.280, up by 2.104% during the day’s trade with a market capitalisation of ~$14.85 billion as on 16 May 2019. The counter opened the day at $7.200 and reached the day’s high of $7.290 and touched a day’s low of $7.160 with a daily volume of ~4,937,157. The stock has provided a year till date return of 35.04% & also posted returns of 14%, 6.26% & 0.14% over the past six months, three & one-month period respectively. It had a 52-week high price of $7.490 and touched 52 weeks low of $5.145, with an average volume of ~4,734,307.


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