The Oil Search Ltd (ASX: OSH) share price is in reverse today. This comes after the energy company revealed the National Court of Papua New Guinea's decision regarding its merger scheme with Santos Ltd (ASX: STO).
During late afternoon trade, Oil Search shares are trading 1.43% lower to $4.14 apiece. The S&P/ASX 200 Index (ASX: XJO) is also down today by 0.07% to 7,400.2 points.
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What was the decision?
In today's statement, Oil Search advised that it has received approval from the National Court of Papua New Guinea in regards to its merger with Santos.
This is another key hurdle within the merger implementation deed that needed to be satisfied. Previously, the company required its shareholders to vote in favour of the transaction, which passed with flying colours.
The latest approval takes Oil Search and Santos one step closer to becoming a super oil and gas company.
Under the scheme, Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held.
Once the transaction is completed, this will give Oil Search shareholders a 38.5% stake in the newly-merged entity. Santos shareholders would retain the remaining 61.5% interest.
Oil Search expects to lodge a certified copy of the orders with the Papua New Guinea Registrar of Companies tomorrow. This will make the scheme effective and Oil Search will apply to have its shares suspended.
Both Oil Search and Santos are hoping to create the largest oil and gas company listed on the ASX. The merged company will have a diversified portfolio of long-life and low-cost assets with significant growth options.
Oil Search share price summary
Since this time last year, the Oil Search share price has risen by more than 10%.
The company's shares have 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 $8.6 billion and has 2 billion shares outstanding.
