As a result of the $US80 million, the Adelaide-based oil and gas producer will acquire a large suite of onshore Gulf of Mexico exploration and production assets. While the deal sees Santos gain only 1 million barrels of proven oil reserves and 47.3 billion cubic feet of proven gas reserves, company executives said the real upside lies in the exploration potential of 16,000 hectares of leases that come with the deal.

"Santos is growing steadily in the United States, through a combination of successful exploration, production optimisation and acquisitions," managing director of Santos, Mr John Ellice Flint said. "The acquisition is expected to provide a base for further growth and result in an increasing contribution to the Santos Group."

Santos shares closed 11.6c higher to finish at $5.86 after the announcement.