Sydney: Santos Sells Gas Field for $A$200 M

Darlington Musarurwa
26 Mar, 2010
New York City

The Australian dollar rebounded and stock struggled. Eastern Star Gas gained on the takeover speculation. Santos Ltd agreed to sell its gas field off the northern coast for A$200 million. Virgin Blue and Qantas report higher passenger loads in February.

[R]7:00 PM Sydney – The Australian dollar rebounded and stock struggled. Eastern Star Gas gained on the takeover speculation. Santos Ltd agreed to sell its gas field off the northern coast for A$200 million. Virgin Blue and Qantas report higher passenger loads in February.[/R]

Stocks in Australia rose fractionally in choppy trading on lingering worries about the Greek debt crisis as European leaders agree on the involvement of the IMF.

Commodity stocks fell as crude oil prices slid 0.2% to $80.50 per barrel.

In Sydney trading ASX 200 Index gained 0.2% or 11.5 to 4,896.90. Of the ASX 200 index stocks, 95 rose, 94 fell, and 11 were unchanged. Isoft Group led gainers in the index shares with a rise of 6.5% followed by Virgin Blue Holdings jumping 5.2%.

The Australian dollar edged up 0.2% to 91.01 U.S. cents.

Imbalances in Recovery to Present Global Growth Challenges, RBA

Reserve Bank of Australia Governor Glenn Stevens said today at a gathering in Sydney that emerging markets of China, India and Brazil are returning to their pre-crisis growth but wealthy nations are still struggling with high debt loads and slow recovery.

Stevens noted that the economic growth in emerging economies such as Brazil, China and India are beginning to show a “V”-shaped trajectory, which is usually characterised by a moderation in the pace of recovery.

However, recovery in the United States and Europe is forecasted to take longer.

According to the RBA, Australia is dissimilar to other countries that had high debt-to GDP ratios even before the crisis set in.

“Looking ahead, the differences in the speed of economic recovery are starting to present challenges of their own, showing up as they do in capital flows, asset valuations and exchange rates. When we add to all that the looming long-term requirement for fiscal consolidation in a number of major countries, there is plenty for markets and policy makers alike to think about,” said Stevens.

Santos to Sell Evans Shoal Stake for A$200 million

Santos Ltd announced today that is has agreed to sell its entire working interest in Evans Shaol in the Bonaparte Basin offshore Northern Australia to Magellan Petroleum for A$200 millions.

The transaction is part of the company’s “ongoing review of commercialisation options for its substantial gas assets in the Bonaparte Basin.”

Magellan will pay Santos a cash consideration of A$100 million for its interest in Evans Shaol with the completion expected in the second half of 2010, while an additional A$50 million will be paid on any financial investment decision to develop Evans Shaol.

In addition, another A$50 million will be paid to Santos upon first production from NT/P 48. The transaction is subject to regulatory approval.

ASX Movers

Energy World Corporation Limited led decliners in the S&P ASX 200 index with a loss of 8.3% followed by losses in Consolidated Media Holdings Limited of 5.4%, in Elders Limited of 4.0%, in ING Office Fund 3.2% and in Mirabela Nickel Ltd 2.9%.

iSOFT Group Limited led gainers in the S&P ASX 200 index with a rise of 6.5% followed by gains in Virgin Blue Holdings Limited 5.2%, in Charter Hall Group of 4.3% and in St Barbara Limited of 3.9%.

Other Movers

Eastern Star Gas Limited the oil and gas explorer increased 3.2% to A$0.94 on the speculation in Australian Financial Review that Santos may bid for the company.

Kathmandu Holdings Limited an outdoor equipment retailer closed unchanged at A$1.85.

Macquarie Group Limited rose 0.4% to A$49.90.

Miclyn Express Offshore Limited offering was priced near the bottom of end of its offer range, which will give the group a market value of about A$516 million or $474 million according to a Reuters report.

Santos Ltd added 0.07% to A$14.77 after the company announced that it has agreed to sell its entire working interest in NT/P 48 (Evans Shoal) in the Bonaparte Basin offshore Northern Australia to Magellan Petroleum Australia Limited (Magellan) for up to $200 million.

Virgin Blue Holdings Ltd. increased 1.2% to 87 Australian cents after domestic passenger count increased 1.6% in February from a year ago month and international passengers total surged 23.6%.

Qantas Airways passenger load increased to 79.4% from 78.4% a year ago month.

Woodside Petroleum Ltd fell 1.1% to A$46.92 after the oil and gas producer dismissed speculation it was mulling a A$15 billion bid or $13.67 billion for Santos Limited.