The Carlyle Group (NASDAQ:CG) and APA (formerly Apache Corp (NASDAQ:APA)) are said to be evaluating the potential acquisition of Santos Ltd's assets in Western Australia and Alaska. This interest follows APA's recent farm-down lease agreement in Alaska.
According to DataRoom, two prominent oil and gas investors are exploring a 10% stake in the Pikka project in Alaska, co-owned by Santos and Repsol (BME:REP). While APA assessed the acquisition a few months ago, its current status remains uncertain.
Environmental concerns and operational expertise limit the number of energy operators with mandates for Alaskan projects. Experts suggest ConocoPhillips (NYSE:COP), with its existing infrastructure, is best positioned to maximise value. However, past tensions over the Barossa acquisition could deter that company from engaging with Santos.
Santos has been working with Moelis on the Alaska sale for more than 18 months. The company inherited a 51% stake in Pikka through a $21 billion merger with Oil Search in 2021.
Initially valued at $1.5 billion to $2 billion, the project could now be worth up to $3 billion due to rising oil prices. The Pikka project, currently under construction, is expected to be completed by 2026. Selling the asset now might result in a discounted price.
Meanwhile, Carlyle is reportedly in discussions to acquire Santos' domestic gas assets in Western Australia after missing out on Woodside Energy’s Macedon and Pyrenees assets.
The assets in question include gas plants at Varanus Island, Devils Creek and Macedon, as well as offshore projects John Brookes and Reindeer fields.
Despite being the second-largest producer of domestic gas in WA, these declining assets could be sold for a nominal sum due to abandonment liabilities.
Speculation also suggests Santos may relaunch its sale process for its stake in the Dorado oil and gas project off the WA coast.
Last year, Goldman Sachs (NYSE:GS) evaluated offers for Santos' interest in Dorado, which it co-owns with Carnarvon Energy. Santos, holding an 80% interest in Dorado, aims to reduce its stake to about 60%.