Woodside in talks with Santos to form $52 billion Australian gas giant

Santos says it's exploring a range of alternative structural options

Woodside Energy Group Ltd. is in preliminary talks with Santos on a potential merger, opening the door for the creation of an Australian gas export powerhouse amid a global wave of multi-billion dollar energy deals. 
 

Discussions are at an early stage, according to Santos, which said it is also exploring a range of “alternative structural options.” Talks “remain confidential and incomplete, and there is no certainty that the discussions will lead to a transaction,” Woodside said in a statement.
 

Woodside, with a market capitalisation of about A$57 billion ($37 billion), is seeking to add growth options to meet oil and gas demand that it forecasts to remain resilient for decades. Smaller rival Santos, valued at A$22 billion, said last month it was working with advisers on options to boost its value. 
 

Both producers have seen their shares decline in recent months, falling at least 15 per cent since the start of August as earnings have retreated.
 

Representatives for the companies weren’t immediately available to comment further. The Australian Financial Review earlier reported the producers were exploring a deal.
 

A possible combination of Woodside and Santos comes amid a wave of merger activity as oil and gas producers figure out how best to deploy last year’s profit windfalls. The talks follow Exxon Mobil’s roughly $60 billion bid for Pioneer Natural Resources and Chevron’s $53 billion takeover of Hess Corp. 

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