Shares in Woodside Petroleum Ltd. fell on July 21 after an unsourced media report said Australia’s top independent gas producer was in talks to buy some or all of BHP Group’s oil and gas assets, analysts and an investor said.
Woodside shares ended down 2 cents in a broader market that rose 0.8% and while BHP rose 1.3%.
The report in The Australian’s Data Room column followed a Bloomberg report which said that mining group BHP was considering selling its oil and gas business, which includes assets off Australia and Trinidad and Tobago plus in the Gulf of Mexico.
BHP and Woodside declined to comment on what both companies called “market speculation.”
“We remain focused on the continued safe execution of our Sangomar project in Senegal and achieving our targeted final investment decision on the Scarborough and Pluto Train 2 developments in Western Australia,” a Woodside spokesperson said in an emailed comment.
RELATED:
BHP Considering Multibillion-dollar Exit from Oil and Gas: Report
The fall in Woodside's shares highlighted investors’ fears that Woodside would need to sell new shares to buy some or all of BHP's oil and gas assets, valued at around $10 billion to $15 billion, which would come on top of spending on its Australian and Senegal projects, analysts and an investor said.
“That’s unpalatable,” said Simon Mawhinney, Chief Investment Officer at Allan Gray Australia, a Woodside shareholder.
He said it would be disappointing if Woodside were to buy any or all of BHP’s petroleum assets “unless BHP were to gift them.”
Credit Suisse analyst Saul Kavonic said there would only be a limited pool of buyers for BHP’s Australian assets, partly because they include ageing assets which face hefty decommissioning costs within the next 10 years.
He also said Woodside would be a “lead candidate” to buy BHP's Australian petroleum assets as Woodside already has stakes in two of them—the North West Shelf LNG project and the Scarborough gas field.
BHP CEO Mike Henry said as recently as March that BHP sees “attractive value and returns to be generated for shareholders for the next decade” from oil and gas, but would sell off more mature assets.
Recommended Reading
E&P Highlights: Aug. 26, 2024
2024-08-26 - Here’s a roundup of the latest E&P headlines, with Ovintiv considering selling its Uinta assets and drilling operations beginning at the Anchois project offshore Morocco.
OMV Makes Gas Discovery in Norwegian Sea
2024-08-26 - OMV and partners Vår Energi and INPEX Idemitsu discovered gas located around 65 km southwest of the Aasta Hansteen field and 310 km off the Norwegian coast.
E&P Highlights: Sep. 2, 2024
2024-09-03 - Here's a roundup of the latest E&P headlines, with Valeura increasing production at their Nong Yao C development and Oceaneering securing several contracts in the U.K. North Sea.
Breakthroughs in the Energy Industry’s Contact Sport, Geophysics
2024-09-05 - At the 2024 IMAGE Conference, Shell’s Bill Langin showcased how industry advances in seismic technology has unlocked key areas in the Gulf of Mexico.
Devon Energy Expands Williston Footprint With $5B Grayson Mill Deal
2024-07-08 - Oklahoma City-based Devon Energy is growing its Williston Basin footprint with a $5 billion cash-and-stock acquisition from Grayson Mill Energy, an EnCap portfolio company.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.