Australia's Oil Search tracks best day in 2-1/2 weeks on merger with Santos

STO

10/09/2021 06:09

(Updates prices and adds RBC comments, background)
    ** Australia's Oil Search  OSH.AX  rises as much as 4.9% to
A$3.83, its highest level in a week
    ** Shares pare gains to trade up 2.5%, on track for their
best day since Aug 24
    ** Santos  STO.AX  on Friday sealed an agreement to buy Oil
Search to create a global top 20 oil and gas company, even as
the Papua New Guinea government raised concerns that the deal
may hurt its local market  urn:newsml:reuters.com:*:nL4N2QC08G  urn:newsml:reuters.com:*:nL1N2QB3FU
    ** STO expects up to $115 mln in pre-tax cost savings from
the deal; shares up 1.2%, as of 0500 GMT
    ** "Santos has a good track record in extracting merger
synergies and we therefore assume synergy savings will grow
further," RBC analysts say in a note
    ** Brokerage says an equity deal between STO and
TotalEnergies SE  TTEF.PA  is possible, which would drive better
unification between PNG LNG and Papua LNG JVs
    ** OSH's key assets include the undeveloped Papua LNG
project, which is led by TotalEnergies  urn:newsml:reuters.com:*:nL4N2PU469
    ** Up to Thursday's close, OSH down 1.6% this year, while
STO down 3.8%

 (Reporting by Shashwat Awasthi)
 ((Shashwat.Awasthi@tr.com
mailto:Shashwat.Awasthi@thomsonreuters.com))