Santos pays A$474 million for Delhi Petroleum

SYDNEY, July 17 (Reuters) Australian oil and gas producer Santos Ltd. said on Monday it would pay Westpac A4 million (6 million) for Delhi Petroleum, increasing its hold over the Cooper Basin petroleum resources.

The deal increases Santos' stake in its onshore Australian Cooper Basin natural gas joint venture to 85 percent, from 63 percent, adding about 67 million barrels of proven and probable oil equivalent reserves.

''Delhi is a natural acquisition for Santos given our long-term operatorship of the Cooper Basin assets and builds on our strategy to extend and enhance the value of our existing core area in eastern Australia,'' said Santos Managing Director, John Ellice-Flint.

''The acquisition will be earnings and cash-flow per share accretive for Santos based on pro forma earnings for the year ending 31 December 2007,'' he said.

Westpac acquired Delhi Petroleum earlier this year when it bought Australian Petroleum Investments (API) from founders David Libling and Graeme Foley.

API acquired Delhi in March 2004 for A5 million, funded by Westpac, which listed A0 million in floating interest energy-linked securities (FIELDS) to offset funding risk.

Under Monday's deal Santos will buy the FIELDS for A.25 per note, representing a 25 percent premium to their last trading price, but a loss of 17 percent on their A0 issue price.

FIELDS investors, who will be asked to vote on the proposal, will also receive a scheduled interest payment of A SYDNEY, July 17 (Reuters) Australian oil and gas producer Santos Ltd. said on Monday it would pay Westpac A$474 million ($356 million) for Delhi Petroleum, increasing its hold over the Cooper Basin petroleum resources.

The deal increases Santos' stake in its onshore Australian Cooper Basin natural gas joint venture to 85 percent, from 63 percent, adding about 67 million barrels of proven and probable oil equivalent reserves.

''Delhi is a natural acquisition for Santos given our long-term operatorship of the Cooper Basin assets and builds on our strategy to extend and enhance the value of our existing core area in eastern Australia,'' said Santos Managing Director, John Ellice-Flint.

''The acquisition will be earnings and cash-flow per share accretive for Santos based on pro forma earnings for the year ending 31 December 2007,'' he said.

Westpac acquired Delhi Petroleum earlier this year when it bought Australian Petroleum Investments (API) from founders David Libling and Graeme Foley.

API acquired Delhi in March 2004 for A$635 million, funded by Westpac, which listed A$300 million in floating interest energy-linked securities (FIELDS) to offset funding risk.

Under Monday's deal Santos will buy the FIELDS for A$83.25 per note, representing a 25 percent premium to their last trading price, but a loss of 17 percent on their A$100 issue price.

FIELDS investors, who will be asked to vote on the proposal, will also receive a scheduled interest payment of A$2.8058 per security in mid-August.

Santos will pay around A$250 million for the FIELDS, assume A$218 million in Delhi debt and make a net payment of A$6 million for the Delhi equity. The Adelaide-based company said it will fund the acquisition with existing debt facilities.

Shares in Santos fell 0.2 percent to A$11.75 compared with a 0.5 percent fall for the S&P/ASX 200 energy sub-index <.axej>.

REUTERS DKS BD0700 .8058 per security in mid-August.

Santos will pay around A0 million for the FIELDS, assume A8 million in Delhi debt and make a net payment of A million for the Delhi equity. The Adelaide-based company said it will fund the acquisition with existing debt facilities.

Shares in Santos fell 0.2 percent to A.75 compared with a 0.5 percent fall for the S&P/ASX 200 energy sub-index <.axej>.

REUTERS DKS BD0700