Woodside advises it has entered into a binding transaction with Apache Corporation to acquire Apache’s Australian Wheatstone LNG and Balnaves oil interests and Kitimat LNG project interests in Canada, for an aggregate purchase price of US$2.75 billion.
Under the terms of the Sale and Purchase Agreements, Woodside will acquire:
- a 13% interest in the Wheatstone LNG Project 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, with immediate production; and
- a 50% interest in the Kitimat LNG project, 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.
Woodside’s ongoing disciplined approach to capital management and acquisition evaluation has resulted in this counter-cyclical, value-adding growth opportunity. It is immediately accretive to Net Profit after Tax, Earnings per Share and operating cash flow. Previous guidance on dividend payout ratio and target gearing is unchanged.
Woodside CEO Peter Coleman said the acquisition was a natural fit with Woodside’s current portfolio and, following a detailed due diligence process, had met Woodside’s internal investment parameters.
“We have taken a disciplined and patient approach to identifying the right growth investment. We are now in a position to take advantage of challenging market conditions and use cash reserves and existing debt facilities to acquire very high quality assets.
“We are also retaining our previous guidance on dividends and we expect our credit ratings to be unchanged. Our capital commitments on both sanctioned projects and sustaining capital are expected to be at a low level of approximately US$0.8 billion each year over the next three years,” he said.
The acquisition has an effective date of 1 July 2014 and is subject to regulatory approvals, pre-emption for both Balnaves oil and Kitimat LNG projects and joint venture participant consent for the Kitimat LNG project. Financial close is targeted by end Q1 2015.