This next $400M spend on arcadia will take Santos $1.3B for...

This next $400M spend on arcadia will take Santos $1.3B for Arcadia for a 75TJ a day flow.

The initial production plan for Muhalo is for 150TJ flow per day let alone ramp up.

Makes you wonder how much Muhalo would be worth to Santos....
Game changer': Santos to invest $400m in Queensland gas project
By Cole Latimer

31 May 2018 — 11:08am
Santos and its partners will invest more than $400 million in its Arcadia coal seam gas assets in Queensland’s Bowen Basin to boost supply to its Gladstone LNG processing facility.
The latest investment is in addition to the nearly $1 billion Santos said in February it would spend to develop new gas fields in the Surat and Bowen basins to provide additional gas for GLNG.
The Arcadia gas project will supply gas to the Gladstone LNG processing facility.
Photo: ROBERT GARVEY
“This initial phase of the Arcadia development will at its peak deliver in excess of 75 terrajoules a day to the gas supply for the GLNG project. This is great news for both the domestic gas market and our LNG exports,” Santos chief executive Kevin Gallagher said.
“The Arcadia project will deliver about 70 per cent more gas than expected when the GLNG project was sanctioned in 2011, so while Arcadia was always going to sustain GLNG production, it is a production growth project as well."
It is forecast to start production late next year and produce about 27 petajoules of gas by 2022.

"If you want to put downward pressure on gas prices, reducing the cost of supply is a good place to start," Mr Gallagher said.

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The investment comes only weeks after Santos rejected a $14.5 billion takeover proposal from US private equity firm Harbour Energy, claiming the bid undervalued the Australian oil and gas company. Knocking back the offer, Santos said it was focused on the growth of its existing projects, which would bring more value to the company.
Citi research analysts believe Arcadia “is a game changer for Gladstone LNG” and will remove the GLNG's processing facility’s current reserve gas shortfall.
Wood Mackenzie's principal oil and gas analyst, Saul Kavonic, said this investment should not be viewed as a new commitment to Santos' growth.
“The Arcadia development was already included within our models and valuation,” Mr Kavonic told Fairfax Media.
“Santos core growth areas in PNG LNG and Darwin LNG are not within its control, so for Santos to deliver a growth story will require some bold advances in CSG or Cooper Basin production well beyond existing expectations for ongoing investment.
The $400 million investment brings Santos' investment in Queensland to around $1.5 billion this year.
Photo: Supplied
“Otherwise Santos will need to pursue M&A. Absent a further big rally in oil prices – and hoping for oil prices to rise isn't a strategy – Santos' management now faces a difficult growth challenge as the share price is likely to trade well below the Harbour offer for some time to come."
The Arcadia project is located near Injune, around 680 kilometres north-west of Brisbane. It will involve drilling 137 new wells, building a140-kilometre gas pipeline, a five-megawatt gas-fired power station, and roads.
Mr Gallagher said the $400 million in funding followed a positive 13-well pilot program in the region.
Santos share price jumped nearly 2 per cent on Thursday morning, rising from an opening price of $5.67 to reach $5.78 in early trading.