M&A in Australasia - 2024 Q1

It has been a busy Q1 in Australasia, with seven new deals announced in the quarter. However, the biggest news was about a potential deal being cancelled:

• In early December 2023, Woodside Energy and Santos confirmed that they were in discussions about a potential merger. However, in early-February 2024l, following almost two months due diligence and negotiations, both companies announced that the merger was off. The merger would have created a US $52 billion company. No official reasons were given for the merger talks ending, but there were reports that the the two companies could not agree on a valuation.

In terms of newly announced deals, Q1 saw seven deals, with six in Australia and one in New Zealand. A transaction value was announced for five of these deals, with a total deal value (for these five deals) of almost US $1.456 billion.

Given this is Q1, the running totals for 2024 are therefore also seven deals, with a total deal value for these deals of almost US $1.456 billion. As a comparison, Q1 2023 saw 4 deals with a total value of about US $828 million.

New deals announced in Q1

The deals announced this quarter are:

• The first deal of the year saw INPEX increase their stake in their Ichthys project by pre-empting the 1.575% interest in the project that MidOcean had agreed to acquire from Tokyo Gas. No deal value was announced for the pre-emption deal and it would appear the asset will pass through MidOcean on the way to INPEX. The deal completed in late-March and INPEX now hold a 67.82% operated stake in Ichthys.
• The second deal came in late-January when ADZ Energy took over the assets of Armour Energy, who had been put into administration in November 2023. I believe the deal completed with the announcement.
• The third deal was announced the next day, with Matahio Energy announcing a deal to acquire East West Petroleum’s 30% stake in the PMP 60291 (Cheal East) permit. The deal is effective 31st July 2023 and is for an upfront payment of US $1 million. Once complete, it will give Matahio 100% in the permit.
• The fourth and fifth deals were announced at the same time in mid-February, with both Horizon and NZOG agreeing to each acquire 25% interests in Mereenie field from Macquarie Mereenie (who exit). Both deals are on identical terms, with a headline cash consideration of US$ 27.6 million, plus up to US$5.8 million in deferred and contingent payments over the next 24 months, and effective 1st April 2023. Once complete, the rights holdings will be Central Petroleum (25% + operator), NZOG (42.5%), Horizon (25%) and Cue (7.5%).
• The sixth deal came in late-February and was the largest of the quarter. It saw Woodside and JERA announce that the latter had agreed to acquire a 15.1% stake in the Scarborough project. The deal has an effective date of 1 January 2022 (essentially from FID) and is expected to complete in the second half of 2024. The purchase price for the deal is US$ 740 million plus historical expenditure from the effective date to the close date, with the estimated total consideration being approximately US$ 1,400 million. My full analysis can be found here: https://www.dhirubhai.net/pulse/australia-ma-jera-agree-acquire-151-stake-from-robert-chambers-qd6ee/.
• The final deal came in late-March, and saw Tamboran Resources and Daly Waters Energy both increase their stake in the proposed Shenandoah South Pilot Project to 47.5%. This follows a decision by Falcon Oil & Gas to limit its participation in the project to 5%. There is no deal value, but Falcon have reduced their share of future costs for the project. I believe the announcement also signals completion.

In addition to the above deals, we also saw the acquisition by TotalEnergies of OMV's stake in SapuraOMV. Whilst the focus of this deal was their Malaysian assets, the deal also included exploration acreage in New Zealand and Australia.

Deals that closed in Q1

In addition to the three deals deal above, five further deals closed in Q1:

• In late-August, Roc Oil agreed to withdraw from the L20 and L21 production licences that contain the Ungani oil field, with their 50% stake being assigned to Buru Energy who now hold 100% interest in the licences. The deal completed in mid-January.
• In mid-November 2023, Jadestone Energy announced a deal to acquire a further 1/6 stake in CWLH, this time from the Japanese partnership MiMi (Mitsui and Mitsubishi). Completion of the deal was announced in mid-February.
• In mid-December 2023, Baron Oil / SundaGas announced an MOU with TIMOR GAP for the latter to acquire a further 15% in the TL-SO-19-16 PSC (Chuditch) in Timor-Leste. The deal became binding at the start of February and completed a week later.
• In early-August, Woodside Energy announced an SPA to divest a 10% stake in the Scarborough project to LNG Japan, a 50:50 JV between Sumitomo Corporation and Sojitz Corporation. Completion of the deal was announced in late-March, with the total deal value adjusted to US $910 million.
• Back in October 2022, a deal was announced for EIG's?(through MidOcean Energy) to acquire Tokyo Gas’ stake in four major integrated gas-to-LNG projects, namely Pluto (+ Pluto LNG T1), Gorgon LNG, QC LNG, and Ichthys. We have seen a few bumps, including INPEX pre-empting the Ichthys stake and Aramco acquiring a stake in MidOcean, but the deal completed in late-March.

Deals still pending completion

In addition to the new deals announced this quarter, there are some previously announced deals that are yet-to-close.

• The first is JX Nippon's acquisition of a 2.58% stake in the Papua LNG project from TotalEnergies that was announced in early-June.?There has been little further news, but the deal could already be complete or be pending approvals.
• At the start of September, Santos and Kumul announced that a binding agreement had been signed for for Kumul to acquire a 2.6% stake in the PNG project from Santos, with an option to acquire a further 2.4%. At the start of February, a "partial completion" was announced, with Kumul having paid US$352 million to Santos (equivalent to a ~1.6 per cent interest). However, there has been no further news on when full completion is expected.
• In mid-October, Greenvale Gold announced a deal to acquire a 75% interest in EP 145 from Mosman Oil and Gas Ltd. In late-January, it was announced that the deal had been amended to extend the right to terminate the agreement from 31 January to 30 March 2024, which likely reflects the expected time to completion.
• In mid-October 2023, Cooper Energy announced a deal to acquire 25.1% stake in PEP 169 from Lakes Blue Energy. Completion of the farmout is subject to completion of due diligence, finalisation of transaction agreements and receipt of requisite consents and approvals, as well as Armour Energy approval and waiving their pre-emption rights. There has been no new news on this.

Assets on the market

I have been keeping track of the assets on the market, with these summarised in the table below.

The main changes from Q4 are:

• I have removed the OMV opportunities for both Australasia and New Zealand related to their 50% stake in SapuraOMV following the acquisition by TotalEnergies. However, both the standalone OMV opportunity (i.e. not a part of SapuraOMV) in New Zealand remains as well as Sapura Energy's 50% stake in SapuraOMV.
• I have added the ongoing Woodside sales process for the sale of the Macedon and Pyrenees assets. I missed this back in August.

Questions and feedback

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