Oil Search (ASX:OSH) share price dips despite PNG court approval of Santos (ASX:STO) merger

Oil Search has passed another key hurdle in its proposed merger with Santos.

| More on:
Oil Search win in court represented by scales, judges hammer and wooden blocks spelling the word win

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Oil Search Ltd (ASX: OSH) share price is in reverse today. This comes after the energy company revealed the National Court of Papua New Guinea's decision regarding its merger scheme with Santos Ltd (ASX: STO).

During late afternoon trade, Oil Search shares are trading 1.43% lower to $4.14 apiece. The S&P/ASX 200 Index (ASX: XJO) is also down today by 0.07% to 7,400.2 points.

What was the decision?

In today's statement, Oil Search advised that it has received approval from the National Court of Papua New Guinea in regards to its merger with Santos.

This is another key hurdle within the merger implementation deed that needed to be satisfied. Previously, the company required its shareholders to vote in favour of the transaction, which passed with flying colours.

The latest approval takes Oil Search and Santos one step closer to becoming a super oil and gas company.

Under the scheme, Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held.

Once the transaction is completed, this will give Oil Search shareholders a 38.5% stake in the newly-merged entity. Santos shareholders would retain the remaining 61.5% interest.

Oil Search expects to lodge a certified copy of the orders with the Papua New Guinea Registrar of Companies tomorrow. This will make the scheme effective and Oil Search will apply to have its shares suspended.

Both Oil Search and Santos are hoping to create the largest oil and gas company listed on the ASX. The merged company will have a diversified portfolio of long-life and low-cost assets with significant growth options.

Oil Search share price summary

Since this time last year, the Oil Search share price has risen by more than 10%.

The company's shares have moved sideways for most of 2021 amid uncertainty in the global economic recovery.

Based on today's price, Oil Search commands a market capitalisation of $8.6 billion and has 2 billion shares outstanding.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

A young man goes over his finances and investment portfolio at home.
Energy Shares

Better buy: Santos or Woodside shares?

Which energy giant does Morgans think investors should be buying? Let's find out.

Read more »

a man with a moustache sits at his computer with his hands over his eyes making a gap between his fingers so he can peek through to his computer screen.
Energy Shares

Why the Woodside dividend could be in danger

Analysts are feeling less energetic about the income potential from this stock.

Read more »

A young man wearing a black and white striped t-shirt looks surprised.
Energy Shares

This ASX 200 uranium stock could rise almost 70% in a year

Bell Potter is bullish about this mining stock. Let's see why.

Read more »

A negative oil worker giving the thumbs down on the falling price of oil.
Energy Shares

2 things driving the Woodside share price down today

Woodside shares are drastically underperforming the market today.

Read more »

A happy young boy in a wheelchair holds his arms outstretched as another boy pushed him.
Energy Shares

Why this $9.9 billion ASX 100 stock just surged 6%

Investors are bidding up the ASX 100 stock on Wednesday. But why?

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Energy Shares

What's going on with Paladin Energy shares today?

This uranium producer doesn't sound confident about completing a big acquisition.

Read more »

A miner in visibility gear and hard hat looks seriously at an iPad device in a field where oil mining equipment is visible in the background.
Energy Shares

Buying ASX 200 energy stocks? Here's ANZ's outlook on the soaring oil price

The oil price has surged 13% in October, boosting Woodside and rival ASX 200 energy stocks. Now what?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

This ASX energy stock just crashed 58%! Here's why

The ASX energy stock lost more than half its market value on Tuesday morning. But why?

Read more »