Petroleum Africa
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Tuesday, August 17, 2021
Woodside Petroleum and BHP have entered into a merger commitment deed to combine their respective oil and gas portfolios by an all-stock merger to create a global top 10 independent energy company by production.
On completion of the Transaction, BHP’s oil and gas business would merge with Woodside, and Woodside would issue new shares to be distributed to BHP shareholders. The expanded Woodside would be owned 52 percent by existing Woodside shareholders and 48 percent by existing BHP shareholders. The Transaction is subject to confirmatory due diligence, negotiation and execution of full form transaction documents, and satisfaction of conditions precedent including shareholder, regulatory and other approvals.
With the combination of two high quality asset portfolios, the proposed merger would create the largest energy company listed on the ASX, with a global top 10 position in the LNG industry by production. The combined company will have a high margin oil portfolio, long life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition.
Woodside CEO and Managing Director Meg O’Neill said: “Merging Woodside with BHP’s oil and gas business delivers a stronger balance sheet, increased cash flow and enduring financial strength to fund planned developments in the near term and new energy sources into the future. The proven capabilities of both Woodside and BHP will deliver long-term value for shareholders through our geographically diverse and balanced portfolio of tier 1 operating assets and low-cost and low-carbon growth opportunities. The proposed transaction de-risks and supports Scarborough FID later this year and enables more flexible capital allocation. We will continue reducing carbon emissions from the combined portfolio towards Woodside’s ambition to be net zero by 2050.”
BHP CEO Mike Henry said: “The merger of our petroleum assets with Woodside will create an organization with the scale, capability and expertise to meet global demand for key oil and gas resources the world will need over the energy transition. Bringing the BHP and Woodside assets together will provide choice for BHP shareholders, unlock synergies in how these assets are managed and allow capital to be deployed to the highest quality opportunities. The merger will also enable the skills, talent and technology of both organizations to build a resilient future as the world’s needs evolve.”
For full coverage on the merger, please see the joint Woodside and BHP announcement here.
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