Woodside Petroleum (ASX:WPL) is acquiring a package of oil and liquefied natural gas interests in Australia and Canada from Apache Corporation (NYSE:APA) for US$2.75 billion (A$3.35 billion).
These interests are immediately accretive to net profit after tax, earnings per share and operating cash flow.
It also comes amidst a 40% fall in oil prices over the last six months.
Under the agreement, Woodside will acquire:
- A 13% interest in the Wheatstone LNG Project near Onslow, Western Australia, and a 65% interest in the Julimar-Brunello upstream gas development, with a near-term production profile;
- A 65% interest in the Balnaves oil project in the Northern Carnarvon Basin offshore Western Australia, with immediate production; and
- A 50% interest in the Kitimat LNG project in British Columbia, Canada, including approximately 320,000 acres in the Horn River and Liard Basins, adding a growth option in an emerging LNG province to Woodside’s development portfolio.
Taken together, the interests will increase the company’s Proved Reserves by 19% to 1,358 million barrels of oil equivalent (MMboe).
The purchase price is fully funded by its existing cash and debt. It is expected to close at the end of the first quarter of 2015.
Projects
Wheatstone LNG is currently under development as an 8.9 million tonne per annum (WPL:1.16Mtpa) LNG export project.
It is operated by Chevron (NYSE:CVX) and includes a 200 terajoule per day domestic gas plant.
The project is currently 49% complete with first LNG expected in later 2016.
Julimar-Brunello has Proved and Probable Reserves (2P) of 279MMboe and will supply gas to the Wheatstone project.
Balnaves is a light oil field that commenced production in August 2014 and has 2P Reserves of 9.8 million barrels of oil.
The Chevron-operated Kitimat LNG project is a proposed 10Mtpa project that will source gas from the Horn River and Liard basins.
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