BHP Group PLC (LSE:BHP) (LSE:BHP) and Woodside Petroleum Ltd (ASX:WPL) have announced plans to merge their respective oil and gas portfolios.
The new entity would be among the largest independent energy companies in the world, in the top 10 for LNG production globally, and the largest energy company listed on the Australian Stock Exchange.
READ: BHP confirms talks with Woodside regarding potential sale of petroleum business
It will have an asset base producing 200mln barrels of oil equivalent consisting of 46% LNG, 29% oil and condensate and 25% domestic gas and liquids.
Yearly revenue and underlying earnings (EBITDA) will be US$8bn and US$4.7bn respectively.
After expected completion in the second quarter of 2022, Woodside will issue new shares to BHP shareholders, which would own 48% of the entire business. The remaining 52% will be held by Woodside shareholders.
The merger will deliver synergies of over US$400mln per year and allow the new entity to reach final investment decision for the Scarborough project in Australia this year as targeted.
BHP will sell its 26.5% interest in the joint venture to Woodside and its 50% in the Thebe and Jupiter joint ventures to Woodside for US$1bn.
The Atlantis Phase 3, Mad Dog Phase 2, Shenzi North, all in the US, and Senegal’s Sangomar Field Development Phase 1 projects remain on budget and on track.
BHP surged 9% to 2,480.75p on Tuesday at the opening bell.