Shell further reduces its interest in Woodside

Dutch Shell plc

Royal Dutch Shell plc has reported the sale of 156.5 million shares in Woodside Petroleum Ltd., representing a total estimated value to Shell of US$5 billion on an after-tax basis. The sale, which represents 19% of Woodside's issued share capital, is through an underwritten sell-down to equity market investors and a selective share buy-back by Woodside.

"Today's announcement is part of our drive to improve Shell's capital efficiency and to focus our Australia growth in directly owned assets," said Shell CEO Ben van Beurden. "It doesn't change our view of Australia as an important player on the global energy stage, or Shell's central role in the country's energy industry."

Shell Australia's country chair, Andrew Smith, added, "Woodside is an important strategic partner for us, through our investments in established projects such as the North West Shelf and growth opportunities such as Browse. We are pleased we have been able to work with Woodside to find a solution that allows us both to meet our strategic objectives. We continue to see Australia as an important place for us to invest and grow our business."

Shell's subsidiary, Shell Energy Holding Australia Ltd. (SEHAL) has mandated two investment banks to sell 78.27 million shares in Woodside, through an underwritten sell-down at a price of A$41.35 per share. This part of the sale represents around 9.5% of the issued capital in Woodside, with the shares to be sold to a range of equity market investors. The sell-down should complete June 18.

Under an agreement with SEHAL, Woodside will also buy back 78.27 million of its shares from SEHAL at a price of US$34.24 per share. The buy-back price per share has been split into a dividend component of US$26.29 per share and a capital component of US$7.95 per share, as agreed with the Australian Taxation Office (ATO) in a private ruling. SEHAL will receive franking (tax paid) credits on the dividend component with the effect that no further tax is payable by SEHAL on the dividend component. Completion of the buy-back will be subject to limited conditions, including consent under a number of Woodside's facility agreements, an independent expert opinion, and Woodside shareholder approval. Completion of the buy-back is expected in early August.

After the buy-back and the sell-down have been completed, including cancellation of the buy-back shares by Woodside, SEHAL's shareholding in Woodside will reduce to below 5%. As part of this transaction, SEHAL has committed to retain its remaining shares in Woodside for 90 days from completion of the sell-down, with limited exceptions.



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