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Oil patch insider: If deal right, Santos OK dropping Pikka lead; Padgett, Heimke news
Kay Cashman Petroleum News
According to Kevin Gallagher, chief executive of Santos Ltd., the shareholders of both Oil Search Ltd. and Santos will likely vote on the merger of their two companies by the end of the year.
One of Oil Search’s priorities this year is to sell up to a 30% stake (split between it and 49% partner Repsol) in the multibillion-dollar Pikka oil development that it operates on Alaska’s North Slope. The company is on track to reach a final investment decision as soon as yearend if it picks up a satisfactory partner.
In his first briefing on the proposed merger which is currently in the due diligence process, Gallagher said he would continue the sell-down process and would be “more flexible” about giving up operatorship than Oil Search has allegedly been with North Slope producer ConocoPhillips. (Neither ConocoPhillips nor Oil Search has said they are, or have been, in negotiations.)
“We’d not waive the operatorship of any asset if the deal was right at the end of the day,” he said in a Q&A session on Aug. 17 with analysts that followed the presentation of Santos half-year results.
“We’ll continue with Oil Search’s plan and we’ll be very flexible on what that would look like in terms of operatorship.”
Gallagher recently told Reuters he has a “very good relationship” with ConocoPhillips and sees the company as a “world class operator.”
As Petroleum News has suggested, ConocoPhillips is a likely bidder for Oil Search’s Alaska assets because the company holds most of the leases and infrastructure surrounding Pikka, as well as acreage across the North Slope near Oil Search leases.
Plus, ConocoPhillips’ top executive Ryan Lance has made it clear in recent financial presentations that his company is interested in picking up oil and gas assets in areas where it already operates, as long as the price is right and the deal brings value to the company’s portfolio.
In his Aug. 17 briefing on the deal, Gallagher said he expects to deliver “significant synergies” from the merger with Oil Search, pointing to Santos’ success in gleaning $160 million in savings following its acquisitions of ConocoPhillips’ northern Australian assets and Quadrant Energy.
Gallagher also said Santos wants to keep a balanced portfolio between natural gas, LNG and liquids. One of the analysts asked if that balance would play a part in looking at Alaska because the Pikka project holds considerable oil (1 billion recoverable barrels-plus). Gallagher said yes - that consideration would play a part in the sell-down process in Alaska.
But Santos continues to emphasize its role as “a proudly Australian company” and an “Australian energy pioneer” and operator.
The company is the second largest independent oil and gas company in Australia, and Gallagher continues to seem far more enthusiastic about the combined companies’ Australia and Papua New Guinea assets than he is about operating in Alaska.
Sullivan selects Padgett U.S. Senator Dan Sullivan, R-Alaska, said Aug. 17 he has appointed Chad Padgett as the new state director for his Alaska Senate office.
“With nearly three decades spent working to improve the lives of everyday Alaskans, Chad Padgett has a deep understanding of the challenges and opportunities we have in Alaska,” Sullivan said. “Chad brings with him a wealth of experience serving on the front lines looking out for the best interests of our communities and he will be a welcome addition to my leadership team.”
Padgett comes to Sullivan’s office from the Bureau of Land Management Alaska. As the career senior executive for BLM in Alaska, he was responsible for the management of 72 million acres of federal lands in the state ranging from recreational lands to the National Petroleum Reserve-Alaska.
He was instrumental in the approval of the Willow Project in NPR-A and revisions to the NPR-A Integrated Activity Plan, opening more lands for oil and gas development in the petroleum reserve.
Prior to joining BLM Alaska, Padgett spent 10 years serving as state director for the Office of Congressman Don Young.
“I am looking forward to serving the people of Alaska in my new role as Senator Sullivan’s state director,” Padgett said. “This is the perfect opportunity to work closer with Senator Sullivan on behalf of Alaska. I share his values and his desire to provide opportunities for all Alaskans and I am very excited to get started.”
Padgett first came to Alaska as a child with his mother who accepted a teaching position in Metlakatla. He graduated from Seward High School and attended Boise State University, earning a degree in political science and international relations before returning to Alaska in 1994.
He is an avid outdoorsman who knows Alaska and understands the challenges of a rural state with little infrastructure and a unique legal framework.
Padgett has been married to his wife Kambe for 28 years. They have four children together.
His first day in the Senator’s office will be Sept. 7.
Heimke joins AIDEA The Alaska Industrial Development and Export Authority said July 22 that Dave Heimke will join AIDEA as chief operating officer.
Heimke previously served as the executive vice president of risk and engineering at Alyeska Pipeline Service Co. and was with the company for more than 10 years.
He first came to Alaska in 1985 after working at scientific research stations in Antarctica. Throughout the years, AIDEA said, Heimke has managed numerous remote Alaska infrastructure development and improvement projects and has also served various technical and operational roles in project management, engineering, and consulting.
Heimke holds undergraduate and graduate degrees in electrical engineering from the University of Alaska Fairbanks.
As chief operating officer, AIDEA said, Heimke is responsible for leveraging its programs to foster public and private investments for Alaska projects and to ensure effective internal communications, planning, management, and operations in fulfilling AIDEA’s mission for job growth and economic opportunity for all Alaskans.
“We’re very excited to have Dave on board,” said Alan Weitzner, AIDEA executive director. “His extensive experience with infrastructure development planning and operational improvement within Alaska makes him a key addition to our leadership team as we grow our programs for Alaskans.”
- INSIDER IS COMPILED BY KAY CASHMAN
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