Santos Ltd., the third largest oil and gas producer in Australia, announced today that it is planning to sell its stake in Evans Shoal in the Bonaparte Basin to Magellan Petroleum Australia Ltd. The company is reportedly selling its entire working interest in Evans Shoal for $A 200 million. Santos said that the company has taken this decision to deepen the funding pool for its liquefied natural gas project.

According to the deal, Magellan will pay Santos $A100 million cash for its interest in Evans Shoal. Additionally Magellan will pay $A50 million on any final investment decision to develop Evans Shoal and another $A50 million upon first gas production from NT/P 48.

Santos is eyeing to expand its business in Western Australia and Northern Territory. The sale of the assets in Evans Shoal is a part of company's strategy of selling its non-core assets and utilizing those funds in its liquefied natural gas projects.

Santos is planning to develop one of five proposed liquefied natural gas projects in Queensland in a joint venture with Petroliam Nasional Bhd.

Santos also said that it is also considering selling its stake in the Barossa and Caldita fields in the Bonaparte Basin off Northern Australia.