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ConocoPhillips To Sell Australia-West Assets To Santos About For $1.39 Bln

ConocoPhillips (COP) said that it agreed to sell its subsidiaries, which hold its Australia-West assets and operations, to Santos for US$1.39 billion, plus customary closing adjustments. In addition, ConocoPhillips will also receive a payment of US$75 million upon final investment decision of the Barossa development project.

ConocoPhillips noted that its subsidiaries hold the company's 37.5 percent interest in the Barossa project and Caldita Field, its 56.9 percent interest in the Darwin LNG facility and Bayu-Undan Field, its 40 percent interest in the Poseidon Field, and its 50 percent interest in the Athena Field.

ConocoPhillips will retain its 37.5 percent interest in the Australia Pacific LNG project and operatorship of that project's LNG facility.

ConocoPhillips stated that it will use proceeds from the transaction for general corporate purposes.

The effective date for the transaction will be January 1, 2019. The sale is expected to be completed in the first quarter of 2020.

Separately, Santos said it is in discussions with existing Darwin LNG joint-venture partners to sell equity in Barossa and further equity in Darwin LNG and also with LNG buyers for offtake volumes. Santos will target the contracting of 60-80% of LNG volumes for 10+ years prior to taking FID on Barossa, which is expected by early 2020.

The acquisition is value accretive for Santos shareholders in year one following completion across a range of metrics and importantly further reduces free cash flow breakeven oil price by approximately US$4 per barrel in 2020, Santos said in a statement.

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