The company will acquire the stake from both Oil Search and ExxonMobil, which are participants in PPL 402 that covers an area of 510 km2.

PPL 402 is located about 40km northwest of Hides gas field and production facilities in PNG.

While the terms of the agreement have been kept confidential, the completion of the deal is subject to customary regulatory approvals.

According to Santos managing director and CEO Kevin Gallagher said: “The agreement demonstrates our commitment to growing our position in Papua New Guinea and working with our long-term partners to explore and develop.”

Following the farm-in, Santos will participate in the recently drilled Muruk 1 exploration well.

Targeting the gas bearing Toro Formation in the surroundings of Hides and Juha fields, the Muruk 1 well is likely to have a mean gas resource of around 2tcf at a proposed depth of about 3,450mts.

After the farm-in deal is completed, the PPL 402 participants will include affiliates of ExxonMobil (42.5%) and Oil Search (37.5%, operator) and affiliates of Santos (20%).

Last month, Santos agreed to sell its Victorian state assets in Australia to Cooper Energy for A$82m ($61.2m) as part of its strategy to exit from offshore Victoria.

Prior to that in March, the company announced completion of its 35% interest in the Kipper gas field in offshore Victoria to Mitsui E&P Australia for A$520m ($388.4m).

Image: Santos will acquire the stake from both Oil Search and ExxonMobil. Photo courtesy of Santos.