Santos favoured as Origin’s Ironbark sale plans take shape

• Bridget Carter

  Mergers & Acquisitions Editor

  

  Scott Murdoch

  Journalist

  
• 11:00PM October 23, 2018
• No Comments

Santos is believed to be in the box seat to acquire Origin Energy’s Ironbark coal-seam gas project as it remains eager to secure more supply for its Gladstone LNG operation.

Origin has been running a sales process for Ironbark and sources suggest that Santos may be the only suitor.

Earlier on, Origin Energy made no secret of the fact that it would target Santos as a buyer, indicating that it would approach its oil and gas rival to sound out its interest.

Santos did not comment.

Ironbark, 150km west of Toowoomba, was bought from prospector Paul Fudge in 2009 for $660 million.

It is now valued at $296m in Origin’s books. It has 192 petajoules of proven, probable and possible reserves (3P) after its gas reserves were downgraded in February, and first production is being targeted for 2020-21.

Santos only two months ago announced it had purchased Quadrant Energy for $2.15 billion, offering a boost to its West Australian natural gas assets. However, despite its focus being on integrating the operation into its overall business, it is understood that acquisitions remain on its agenda.

The other takeover target thought to be on its radar is Comet Ridge, which has a market value of $255m and jointly owns the Mahalo project in Queensland with Santos and APLNG.

The acquisitions would go a long way in shoring up supply for Gladstone LNG, which is one of the largest assets owned by Santos and is in need of gas supply to export to customers offshore.

GLNG has been supplying two long-term Asian customers since the first cargo was shipped in October 2015 and Santos is a 30 per cent shareholder. Elsewhere, companies are continuing efforts to list before Christmas. This is despite the disappointing debut of Coronado Coal on the market yesterday.

Crescent Capital is pencilling in November 22 as the listing date for its business, National Dental Care.

NDC’s market value is anticipated at $99m-$108m, with the company to carry about $8m of debt.

Wilsons is working on the transaction. It comes as Ampcontrol starts its marketing roadshow this week for its float slated for December 4.

As revealed online by DataRoom yesterday, the company, which is 43.3 per cent-owned by Washington H. Soul Pattinson, is selling shares at $2.20 each with total proceeds of the offer to be $100m.

The group’s market value is on track to be $184.6m in a deal handled by Morgans and Bell Potter, equating to 13 times the group’s forecasted net profit for 2019.

Feedback so far from investors is that they see Ampcontrol as a well-run business, but much of their support will come down to their view on price.

Ampcontrol specialises in electrical engineering and control systems including transformers, power distribution, electronic equipment and electrical protection and will use proceeds to pay back $44m worth of loans.