The deal will increase Santos’ interest in the Cooper Basin joint venture from about 63% to 85% and add about 67 million barrels of proven plus probable oil reserves.

Managing director John Ellice-Flint told the Australian Stock Exchange today that Santos was pleased to have reached an agreement that was mutually beneficial to the company and the floating interest energy linked securities (FIELDS) note holders.

“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,” he said.

All of the associated FIELDS, issued by the Australian Onshore Energy Fund, will be transferred to Santos via a creditor’s scheme of arrangement.

Westpac Funds Management, the responsible entity for AOEF, has welcomed the offer. It will recommend the deal to FIELDS note holders, in the absence of a higher offer and subject to an independent expert’s report.

Santos said its offer valued FIELDS at about $250 million compared with a face value of $300 million. The deal will also see Santos assume outstanding debt of about $218 million and make a payment of $6 million in respect of the Delhi equity.

Delhi currently has a 21% stake in the Cooper Basin JV, with Santos owning 66% and Origin Energy 13%.