Santos has recently finalized a binding sales agreement aimed at transferring a 2.6% participating stake in PNG LNG to Kumul Petroleum Holdings Limited (Kumul). This transaction involves a total purchase value, consisting of $576 million in cash and taking on approximately $160 million in project finance debt, as outlined in the Sale Agreement.
Furthermore, Santos has also entered into an arrangement with Kumul, granting them a call option to potentially acquire an additional 2.4% participating interest in PNG LNG. This option comes with a cash purchase price of $524 million, accompanied by a proportional share of the project finance debt; referred to as the "Call Option."
Kevin Gallagher, the Managing Director and CEO of Santos, expressed his views on this revised transaction, noting, "This restructured deal represents a practical solution that paves the way for completion and strengthens our strategic alignment with Kumul. It underscores our enduring relationship with PNG, where Santos has proudly operated as a dedicated corporate entity for more than four decades."
He went on to emphasize the significance of PNG LNG, highlighting it as a cost-effective, environmentally friendly asset that delivers substantial financial returns to its project participants while also providing significant economic and social advantages to the nation.
The Prime Minister of Papua New Guinea, James Marape, extended his support for the agreement, stating, "This transaction will enhance Kumul's stake in PNG LNG and aligns with the objectives of the PNG government to ensure our people have a greater equity stake in the development of our natural resources."