Santos share price rises amid joint venture news

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the Santos S.A. (ASX: STO) share price outperformed today after announcing that its joint venture (JV) has been named the preferred bidder for two gas exploration plays in central Queensland.

The new areas are contiguous to existing project areas owned by Santos and its JV partner, State Gas Ltd (ASX: GAS).

New tenders boost sentiment towards Santos share price

According to State Gas, the two new plays hold great promise for coal seam gas in the Bandanna formation. The prospects could also contain conventional gas and are not limited by the domestic gas reservation.

Not only will the new zones connect the joint venture partners’ existing projects, but they will also provide economies of scale and other synergies to the companies.

The exploration areas cover 1,035 square kilometers and will increase State Gas’ area by 60% to 2,630 square kilometers.

Santos holds 65% of the new permits and is the operator, given its experience in managing major projects.

State Gas Executive Chairman Richard Cottee said:

“Santos is a major player in the industry, with a long history of safe and sustainable operations. Of particular importance here is its extensive presence in the region and its unrivaled experience with Bandanna coals, the primary target for these new blocks and our existing Rolleston-West project.

Santos share price was also boosted by oil price gains

Santos stock price jumped 2% to $8.26 during the midday trade when the S&P/ASX 200 Index (ASX:XJO) added a modest 0.3%.

The biggest gainer is State Gas stock price, which jumped 12% to 28 cents at the time of writing.

But today is a good day for ASX energy stocks overall. The 2.5% rise in the price of Brent to US$113.95 energized the sector.

Why is the price of oil rising?

The overnight rise in the price of oil follows news that Shanghai’s tough lockdown will end.

the Woodside Petroleum Limited (ASX:WPL) the stock price is also up 2% at $31.12 and the Beach Energy Ltd (ASX:BPT) the stock price rose 4.4% to $1.71.

Santos share price rises amid joint venture news

Besides, Santos also announced that its other JV with Petroleum Power Plant Limited (ASX: CTP) has received authorizations to carry out certain activities. These include drilling contracts and environmental and land access approvals.

This joint venture aims to drill three sub-salt exploration wells in 2023 in search of hydrocarbons, helium and natural hydrogen south of Alice Springs.

Santos stock price has gained more than 16% over the past year. This is largely thanks to the war in Ukraine which is driving up oil prices.

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