Australian oil and gas company Santos has agreed to sell its non-core gas assets in the country to optimise its portfolio and focus capital on priority growth projects. 

The company has executed a conditional agreement to sell a 42.86% operated stake in the Mahalo joint venture (JV), located in Queensland’s Bowen Basin, to Comet Ridge. 

This deal will see Santos receive an upfront consideration of A$40m ($26.5m) and up to A$20m in contingent payments connected to production milestones. 

Santos has also completed the sale of its 42.71% interest in the Petrel fields and its 100% interest in the Tern fields in the Bonaparte Basin to Eni Australia. 

This set of divestments provided Santos with cash and contingent consideration and reduced its future decommissioning obligations. 

Santos managing director and CEO Kevin Gallagher said: “I am pleased to agree commercial terms with our existing partners that will allow them to progress the development of these assets, unlocking future supply for the Australian domestic gas market. 

“These two transactions reflect our commitment to capital discipline to deliver sustainable and competitive shareholder returns. 

“Santos’ near-term priorities are to deliver Barossa and Pikka, and to progress the next phase of growth opportunities that leverage our existing operating footprint. We wish Eni and Comet Ridge all the best in developing these assets.” 

In September this year, Santos announced that the BW Opal floating production, storage and offloading vessel received its first gas from the A$6.83bn Barossa LNG project offshore northern Australia.   

The floating unit serves as the central production hub for the Barossa project.  

During the same month, an XRG-led consortium that includes Abu Dhabi Development Holding Company and Carlyle, withdrew its $18.7bn indicative offer to acquire 100% of the issued shares of Santos.