Woodside-BHPP marriage comes with hefty dowry

Woodside Energy says it has completed its merger with BHP’s oil and gas portfolio and new Woodside shares will start trading this week.

Woodside has acquired the entire share capital of BHP Petroleum International Pty Ltd (BHPP) and issued 914,768,948 new Woodside shares to BHP, which BHP will in turn distribute to its eligible shareholders.

Woodside said it will receive net cash of around $US1 billion, which includes the cash remaining in the BHPP bank accounts immediately prior to completion.

This reflects $US1.8 billion in net cash flows generated by BHPP between the effective date of July 1, 2021 and completion, less $US800 million representing BHP’s entitlement to cash dividends paid by Woodside over the same period.

Woodside said the new shares are expected to commence trading on the ASX from Thursday, June 2. Trading of Woodside American Depositary Shares on the New York Stock Exchange is expected to also start on June 2. Trading of Woodside shares on the Main Market of the London Stock Exchange is expected to commence on June 6

Woodside says it has started integration moves for the two organisations, including standardisation of reporting across all jurisdictions. The updated production guidance, reserves position and other related information will be released in due course (later this year). the aim of the integration is to cut costs and around $US400 million in annual costs (which will mean job losses).

Woodside said its net profit after tax for the June half of 2022 “will incorporate the contribution of the BHPP portfolio from completion and the accounting treatment of the BHPP portfolio will align with Woodside’s policies.”

Woodside CEO Meg O’Neill said completion of the merger was one of the most significant events in Woodside’s 67-year history and marked the start of a new chapter for the company.

“The merger delivers a diverse portfolio of quality operating assets, plus a suite of growth opportunities across oil, gas and new energy that promises ongoing value for our shareholders.

“We believe the completion of the merger will enable Woodside to play a more significant role in the energy transition that is imperative as we respond to climate change while ensuring reliable and affordable supplies of energy to a growing and aspirational global population.

“We are focused on unlocking pre-tax annual synergies of more than $400 million as we merge the two businesses,” she said.