The Oil Search Ltd (ASX: OSH) share price is pushing upwards today following a positive update by the energy producer.
At the time of writing, Oil Search shares are up 0.76% to $3.97 apiece. In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 0.28% to 7,220.7 points.
What did Oil Search announce?
In today's statement, Oil Search advised that it has received approval from the Papua New Guinea Securities Commission regarding its merger with Santos Ltd (ASX: STO).
This is just one of the conditions of the merger implementation deed that needed to be satisfied.
However, there are still a few hurdles to overcome. This includes clearance from the Independent Consumer and Competition Commission of Papua New Guinea as well as approval by Oil Search shareholders at the scheme meeting to be held tomorrow.
The Oil Search board unanimously recommends that its shareholders vote in favour of the scheme in the absence of a superior proposal.
In addition, other court approvals and the satisfaction or waivers of certain other customary conditions is required.
Both Oil Search and Santos are hoping to create the largest oil and gas company listed on the ASX. In essence, this would give the super-company a diversified portfolio of long-life and low-cost assets with significant growth options.
The offer consists of Oil Search shareholders receiving 0.6275 new Santos shares for each Oil Search share held. Upon completion, this would give Oil Search shareholders a 38.5% stake in the newly merged entity. Santos shareholders will retain the remaining 61.5% interest.
Oil Search share price summary
Since this time last year, Oil Search shares have gained more than 5%, with year-to-date growth hovering just under 7%. The company's share price has moved sideways for most of 2021, amid uncertainty in the global economic recovery.
Based on today's price, Oil Search commands a market capitalisation of roughly $8.2 billion, and has 2 billion shares outstanding.
