27/02/2026
From the Australian on the Santos de-merger. Thery are trying to get rid of Narrabri. This is what its about. Problem is no one wants it. They are also decommissioning some well sites in the forest.
"Energy giant Santos weighs demerger of major assets to attract takeover bids
Speculation is mounting that the $22bn listed Australian energy company Santos is assessing the merits of demerging its poorer-performing assets as part of a strategic review set to conclude around May.
The plan, say sources, would involve Santos moving its Western Australia and Cooper Basin assets into the new structure, along with its Narrabri Gas Project in NSW and its 80 per cent share of its Dorado Project in Western Australia.
It comes after the company told the market this month that it was launching a strategic review of the Australian business.
At the time, some believed that could result in the company selling down stakes in its projects such as Narrabri and Dorado.
However, there are now suggestions the demerger is on the agenda, which could be by way of an in-specie distribution.
Alternatively, a buyer could take the non-core assets in what could resemble Origin Energy’s move to sell off non-core parts of its business.
The non-core assets were named Latitude Energy by Origin and the entity was purchased by Beach Energy, also tipped as the most logical buyer of the Santos assets.
Sources say that the non-core arm would be valued in the billions, but the challenging part would be addressing the remediation liabilities linked to older assets in the non-core structure.
The move comes after one of the major shareholders in Santos, L1 Capital, had previously placed pressure on the company to embark on a similar demerger that would leave it as a pure-play Australian LNG business, with the exception being its Pikka project in Alaska that it inherited through its Oil Search acquisition and had previously tried to sell.
Demerging the non-core assets could mean that Santos, comprising LNG and Alaska assets, could revive takeover interest in the Kevin Gallagher-run company.
Woodside previously weighed a bid for Santos, as first flagged by DataRoom, as did XRG, controlled by the Abu Dhabi National Oil Company, offering $30bn.
However, there have been suggestions that the liabilities linked to the assets believed to be up for review were deterrents.
If the demerger went ahead, Santos may not only attract takeover interest from former suitors but global energy players such as Chevron, Shell, BP or Exxon Mobil and ConocoPhillips.
Santos has flagged it will advise the market of the outcome at its investor day on May 26 and a company source said the strategic review was in the early stages.
The Cooper Basin assets were estimated to be worth between $300m and $700m last year.
Over the next four years, Santos will need to begin provisioning for assets such as those in the Cooper Basin in a meaningful way.
Abandonment liabilities on Cooper Basin assets are expected to be significant, with the South Australian government – having been left with clean-up costs on past projects – particularly mindful about avoiding a repeat scenario.
Santos shares on Thursday closed down 6c to $6.76.
For 2025, the company reported a 25 per cent fall in its underlying profit to $US898m ($1.26bn)."
