Oil and gas giant Santos agrees to extend due diligence period in ADNOC takeover
Australian oil and gas giant Santos has agreed for a second time to extend the exclusive due diligence window for Middle Eastern energy behemoth ADNOC in a major development to the closely watched takeover saga.
Santos announced the second extension on Monday morning, notifying investors it would now give the Abu Dhabi National Oil Company until September 19 to formalise its offer.
“On August 24, the XRG consortium again confirmed it has not found anything in due diligence that would lead it to withdraw its indicative proposal,” the company said.
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On August 11, Santos announced it would extend the process to August 22.
ADNOC lobbed a $30 billion takeover bid for Santos in June and Santos agreed to the company’s “indicative proposal” or initial offer.
Under the deal, XRG, an ADNOC subsidiary, would acquire all of Santos’ shares for a cash price of $8.89, which represents a 28 per cent premium on the $6.96 closing price of the company’s stock before the announcement.
The due diligence period gives XRG exclusive access to Santos’ confidential information as it prepares for a final decision.
But Santos, a $25 billion company, is a jewel in Australia’s corporate crown and a major domestic energy producer.
The prospect of foreign control of parts of the country’s energy system has triggered caution from policymakers.
ADNOC will need to gain a multitude of approvals for the deal to go through, including from the Foreign Investment Review Board, the Australian Securities and Investments Commission, the National Offshore Petroleum Titles Administrator and from authorities in the US and Papua New Guinea.
Santos owns and operates a vast sprawl of oil and gas operations and projects in South Australia, Western Australia, Queensland, PNG and Alaska.
Its $5.7 billion Barossa gas project off Darwin in the Timor Sea was now 98 per cent complete and the first gas was expected “imminently”, the company said.
In its earnings results for the first half of the 2025 financial year, Santos reported net profits after tax of $677 million, a 33 per cent fall on the prior year.
Revenues, meanwhile, fell 4.3 per cent from to $4 billion
The company credited lower realised oil and gas prices over the period for the drop-off.
Santos also delivered $1.7 billion in free cash flow from operations.
Chief executive Kevin Gallagher said the company’s “low cost operating model” continued to underpin the resilience of the business in its “continual fight against inflation throughout the commodity price cycle”.
“Another strong cash-flow year from our long-life gas assets has enabled us to deliver shareholder returns while investing in our Barossa and Pikka development projects, which will bring new production online this year and next,” he said.
“Barossa LNG together with Pikka phase 1 are expected to deliver a 30 per cent increase in production by 2027.”
Shareholders will receive an interim dividend of US13.4c a share, franked to 10 per cent.
Shares in the company lifted 1 per cent in morning trade to hit $7.84.
Originally published as Oil and gas giant Santos agrees to extend due diligence period in ADNOC takeover
