Update: Santos backs Crosby/Bob William take over on Novus

Australian oil company Santos Limited announced on Friday that it had entered into an agreement with Sunov Petroleum Pty Ltd, a vehicle company owned by Crosby Capital Partners and Novus? chairmanto acquire Novus Petroleum?s Indonesian and Cooper Basin assets.

The agreement is conditional on Sunov?s offer for Novus being successful.

Santos has agreed to enter into Procurement, and Sale and Purchase Agreements, to acquire Novus? 25% interest in the Kakap PSC, Novus? 50% interest in the Brantas PSC, both in Indonesia, and Novus? interests in the Cooper Basin for a total cash consideration, of US$192 million, adjusted for an effective date of 1 January 2004, plus contingent consideration linked to reserves upside in the Wunut field, which is capped at US$10 million.

Sunov Petroleum is trying to outbid JSX-listed oil company PT. Medco Energi International Tbk, which made hostile take over bid to acquire Novus by offering shareholder A$1.74 per share. Sunov?s offering is $1.77 per share.

Santos? Managing Director, John Ellice-Flint, said the agreement to acquire Novus? Indonesian and Cooper Basin assets represented a continuation of Santos? strategy to grow its Indonesian and Australian gas businesses.

?If Sunov is successful, it will enable us to supplement our portfolio with those parts of the Novus portfolio that suit our objectives and do so in a cooperative manner.?

Medco had extended its offer twice, setting newest deadline at April 6. Reports said that Novus shareholders might reject both companies offer as they are considered too low.

Novus had recently released a report by independent valuer Grant Samuel & Associates Pty Ltd, pricing Novus shares between $1.96 and $2.75 per share. The valuer said at the time Medco's offer attributed no value to Novus's exploration upside, concluding the offer was "neither fair nor reasonable."

Novus's independent directors have indicated they were in discussions with other parties regarding alternative offers and issued a statement advising shareholders to take no action in relation to either bid.

Novus reported a net profit in 2003 of A$12.3 million compared to a loss of $34 million in 2002. (alex)