By Robb M. Stewart

MELBOURNE, Australia--Macquarie Group Ltd. (MQG.AU) has agreed to buy a 50% stake in an oil-and-gas field in central Australia, positioning it as a partner in the operation to Central Petroleum Ltd. (CTP.AU), which has spurned its takeover approach.

Santos Ltd. (STO.AU) said Tuesday it had agreed to sell its half of the Mereenie field, including a pipeline to the town of Alice Springs, to a subsidiary of Macquarie. It said furtherdetails of the deal, which is part of its strategy to simplify its portfolio and sell noncore assets, would be released along with its quarterly results in January.

A spokeswoman for Macquarie declined to comment on the Mereenie field or Central Petroleum.

Central Petroleum took over as operator of the producing Mereenie field in 2015 after buying a 50% interest in the assets from Santos for 45 million Australian dollars (US$32.6 million) in cash. That deal positioned it as operator of three gas fields in the Amadeus Basin in Northern Territory.

In mid-November, Central Petroleum said it had received a nonbinding offer from Macquarie at 17.5 Australian cents a share, valuing it at about A$76 million. Despite rejecting the offer as not in the best interest of shareholders, its board agreed to allow Macquarie due diligence access so it might reconsider its proposal.

Macquarie Bank is a shareholder of Central Petroleum, holding a 2.3% stake at Sept. 15, and its principal financier, Central Petroleum said.

The Mereenie field was discovered in 1963 and began production in 1984, selling oil to South Australia state and gas to Northern Territory.

In 2015, Macquarie Capital teamed with Brookfield Asset Management Inc. (BAM) for the US$2.1 billion acquisition of Apache Energy Ltd.'s oil-and-gas assets in Western Australia, which formed the foundations for a company renamed Quadrant Energy.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

December 20, 2016 01:54 ET (06:54 GMT)

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