Woodside and BHP merge to create a global energy company

Woodside Petroleum Ltd and BHP Group have entered into a merger commitment deed to combine their respective oil and gas portfolios by an all-stock merger (the “Transaction”) 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 per cent by existing Woodside shareholders and 48 per cent 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.

Attractive strategic and financial rationale
The combination of Woodside and BHP’s oil and gas business is expected to deliver substantial value creation for both sets of shareholders from across a range of areas, including:
• Greater scale and diversity of geographies, products and end markets through an attractive and long-life conventional portfolio
• Resilient, high margin operating cash flows to fund shareholder returns and business evolution to support the energy transition
• Strong growth profile with a plan to achieve targeted Scarborough FID in the 2021 calendar year and capacity to phase the most competitive, high-return options within the portfolio
• Proven management and technical capability from both companies
• Shared values and focus on sustainable operations, carbon management and ESG leadership
• Estimated synergies of more than US$400 million (100 per cent basis, pre-tax) per annum from optimising corporate processes and systems, leveraging combined capabilities and improving capital efficiency on future growth projects and exploration
• Greater financial resilience, relative to Woodside’s and BHP’s standalone petroleum businesses.

Information Source: Read Full Release ..–> | Energy, Climate, Renewable, Wind, Biomass, Sustainability, Oil Price, LPG, Solar
The information comprised in this section is not, nor is it held out to be, a solicitation of any person to take any form of investment decision.

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