The merged entity will be in the top-20 ASX-listed companies and the 20 largest global oil and gas companies with 2021 production expected to be about 116 million barrels of oil equivalent.

Santos is already South Australia’s largest company.

The company will remain headquartered in Adelaide and led by current Santos managing director and chief executive officer Kevin Gallagher with three non-executive directors from Oil Search to join the Santos Board.

The Oil Search board of directors has unanimously recommended that its shareholders vote in favour of the merger.

Oil Search shareholders will receive 0.6275 new Santos shares for each Oil Search share held if their vote rubber stamps the deal.

Upon implementation of the merger, Oil Search shareholders will own about 38.5 per cent of the merged entity and Santos shareholders 61.5 per cent.

Santos expects the merger to unlock “pre-tax synergies” of up to $150 million per year.

Santos chairman Keith Spence said the merged entity would be well-positioned for success in the new era of oil and gas, with strong cashflow generation from a diverse range of assets.

“The merger represents an attractive combination of two industry leaders to create a regional champion of quality, size and scale with a unique and diversified portfolio of long-life, low-cost oil and gas assets,” he said.

“We look forward to integrating our businesses to create one high performing team – with a vision of becoming a global leader in the energy transition.”

Santos revealed to the Australian Securities Exchange on July 20 it put a confidential merger proposal to Sydney-based Oil Search on June 25.

Oil Search rejected the initial offer as it did not offer appropriate value for shareholders but said it was open to further approaches.

The revised merger plan was put forward on August 2.

With offices in Sydney, Port Moresby, Alaska, Tokyo and Abu Dhabi, Oil Search has a history of active exploration and production in Papua New Guinea dating back to the 1920s.

It also acquired oil leases on the Alaskan North Slope in 2018.

Oil Search chairman Rick Lee said the combined entity would have the capacity to deliver on an exciting pipeline of organic growth opportunities.

“Put simply, this merger provides Oil Search shareholders with a compelling opportunity to participate in a larger entity with significant scale, product mix, ESG and geographic diversity, and access to capital,” he said.

With its origins in the Cooper Basin, Santos has one of the largest exploration and production acreages in Australia and extensive infrastructure.

It is already Australia’s largest domestic gas supplier and aims to be a leading Asia-Pacific LNG supplier.

In March, Santos approved its $4.7 billion Barossa project north-west of Darwin, which it says represents the biggest investment in Australia’s oil and gas sector since 2012.

Gallagher said the increased scale and capacity would drive a combined disciplined, low-cost operating model and unrivaled growth opportunities over the next decade.

“The merger will create a company with a balance sheet and strong cashflows necessary to successfully navigate the transition to a lower carbon future with the combination of Santos’ leading CCS capability combining with Oil Search’s ESG programs in PNG and Alaska to provide a strong foundation,” he said.

Santos ranked No. 1 in InDaily’s 2020 South Australian Business Index – an annual review of the top private and public companies in the state.