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Santos gobbles up Eastern Star Gas, boosts natural gas reserves position to largest in NSW

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Santos (ASX: STO) has completed its acquisition of Eastern Star Gas and now holds the largest natural gas reserves position in New South Wales. 

The company now operates and owns 80% of coal seam gas (CSG) permits formerly held by Eastern Star, taking its total New South Wales reserves position to 1,216 petajoules of proved and probable reserves and 2,238 petajoules of proved, probable and possible reserves.

TRUenergy will own the remaining 20% of the permits under a separate transaction to be completed in conjunction with the acquisition.

Eastern Star Gas’ main project is the Narrabri Coal Seam Gas Project, which covers 7,920 square kilometres of the Gunnedah Basin, the most lightly explored portion of the Bowen-Gunnedah-Sydney Basin complex which presently supplies a large proportion of Australia’s coal seam gas production.

The company made the decision to accept Santos’ takeover proposal because it will address the commercialisation and funding challenges and risks associated with bringing the Narrabri Gas Project to fruition on a standalone basis.

Eastern Star Gas’ CSG operations in the region have received strong opposition and Santos is in the process of reviewing all of the company’s current operations and future project plans.

Santos said it will consult widely with local communities as the company consolidates its development plan for northern New South Wales.

Over the next year, Santos will progress plans to drill 15 pilot exploration wells and associated water monitoring bores, with a similar level of exploration over the following couple of years if the initial activity is successful. 

The data and knowledge collected from those wells and water monitors will provide the scientific basis for CSG development and production applications in the future.

Santos will spend about $500 million on this exploration research.

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ASX:STO
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