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Santos has announced plans to sell half of its working interest in 148 exploration leases in Alaska, US.

The Australian oil and gas company did not disclose the financial terms of the deal, which was signed with APA Alaska and Lagniappe Alaska, a subsidiary of Armstrong Oil & Gas.

Spanning more than 270,000 acres, the leases are located on the eastern Alaska North Slope.

They have multiple prospects in the late Cretaceous Brookian and Schrader Bluff formations, the energy company said.

The asset was bought by Santos as part of its merger with Oil Search in 2021.

As per the terms of the agreement, Santos will not be charged for the initial activities during the exploration phase.

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By GlobalData

For Santos, the sale is part of its strategy to focus on the Pikka development.

As the operator, Santos holds a 51% stake in the Pikka project with the remaining 49% stake held by Repsol, a Spanish oil major.

In August 2022, Santos made the final investment decision (FID) to develop the first phase of the Pikka oil project, worth $2.6bn (A$4bn).

Pikka Phase 1 is expected to begin production in 2026 and have a daily production capacity of 80,000 barrels of gross oil.

Santos managing director and CEO Kevin Gallagher said: “I am pleased we have reached this agreement to farm down our exploration assets in Alaska. This transaction demonstrates the continued level of interest in exploration and development projects in the region, a tier-one jurisdiction with supportive stakeholders and prospective undeveloped acreage.

“We look forward to working with our partners on the North Slope and continuing to build strong relationships together as we continue to develop and optimise our Alaskan business.”

Following the divesture, which is subject to relevant regulatory approvals, Santos’ working interest in the assets would be 25%.