Oil and gas producer Santos on Wednesday announced that it would divest two noncore assets in Queensland and offshore Northern Australia.

The ASX-listed energy major executed a conditional sale and purchase agreement to sell its 42.86% operated interest in the Mahalo joint venture, in Queensland’s Bowen basin, to Comet Ridge, for A$40-million in upfront consideration and up to A$20-million in contingent payments linked to production milestones.

In a separate transaction, Santos has completed the divestment to Eni Australia of its 42.71% interest in the Petrel fields and its 100% interest in the Tern fields, located in the Bonaparte Basin offshore Northern Australia. The sale has delivered cash and contingent consideration and will also reduce Santos’ future decommissioning exposure.

Santos MD and CEO Kevin Gallagher said the transactions demonstrated the company’s capital discipline and focus on monetising assets that were not near-term priorities. “These transactions demonstrate Santos’ capital discipline, monetising pre-development assets that are not near-term priorities in our capital allocation framework,” he said.

Gallagher added the divestments would enable Santos’ partners to advance the assets, supporting future domestic gas supply.

“I am pleased to agree commercial terms with our existing partners that will allow them to progress the development of these assets, unlocking future supply for the Australian domestic gas market,” he said.

“These two transactions reflect our commitment to capital discipline to deliver sustainable and competitive shareholder returns,” Gallagher said.

“Santos’ near-term priorities are to deliver Barossa and Pikka, and to progress the next phase of growth opportunities that leverage our existing operating footprint. We wish Eni and Comet Ridge all the best in developing these assets.”

Santos said the divestments form part of its ongoing portfolio management strategy, aimed at simplifying the asset base, recycling capital and reducing future liabilities, while maintaining a strong focus on projects expected to drive value in the near to medium term.