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    Woodside, BHP approve merger deal

Summary

Completion of the merger is targeted for the second quarter of 2022.

by: Shardul Sharma

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Woodside, BHP approve merger deal

Woodside Petroleum has signed a binding agreement to merge with BHP’s oil and gas business, the companies said on November 22. Woodside will acquire the entire share capital of BHP Petroleum in exchange for new Woodside shares.

The combined entity will be among the top 10 independent energy companies with production of 200mn barrels of oil equivalent for this full year, and 2P reserves of 2bn boe, 59% of which is gas. The tie-up is expected to create $400mn/yr in synergies through corporate processes and systems, combining capabilities and improving capital efficiency. The merger was announced in August this year. 

The new company will have a high-quality conventional asset base with LNG making up 46% of the output. Of the remainder, 29% is oil and condensate and 25% is domestic gas and liquids. The geographic spread is wide, with output from Western Australia, east coast Australia, US Gulf of Mexico, and Trinidad & Tobago with about 94% of production coming from OECD countries.

The merged entity will be owned 52% by existing Woodside shareholders and 48% by existing BHP shareholders. Completion of the merger is targeted for the second quarter of 2022.