The proposed sale by Santos of its 40% interest in the Evans Shoal gas field in Australia's Timor Sea to US-based Magellan Petroleum has collapsed, the company said in a statement Wednesday.
Magellan agreed to buy the stake in Evans Shoal from Santos in March 2010 for a payment of A$100 million ($107 million) cash on completion, with further payments of A$50 million due when a final investment decision on a development was made and again when first gas production occurred from the NT/P48 permit which covers the Bonaparte Basin field.
"The sale transaction will not complete because the conditions to completion have not been satisfied by the May 31, 2011 deadline," Santos said. "Santos therefore will retain its 40% interest in NT/P48 and will remain as operator of the permit. Santos will also retain a A$15 million non-refundable deposit paid by Magellan."
Magellan flagged the failure of the deal earlier this week, when it said it would not complete the deal "at this point." Magellan said it had decided to withdraw due to "recent substantial modifications to the Evans Shoal work program."
Evans Shoal was discovered in 1988 and has an estimated contingent gas resource of around 7 Tcf, according to Magellan. The other stakeholders in the field are Malaysian state-owned Petronas (25%), Shell (25%) and Japan's Osaka Gas (10%).
