BHP expected to put in $49 bn bid for Woodside!!!

BHP Billiton Ltd. (BHP) will make a A$46 billion ($48.5 billion) bid for the Australian oil and gas producer. BHP is in talks to buy Royal Dutch Shell Plc (RDSA)’s 24 percent stake in Woodside and make a full takeover offer. BHP would swap some of Woodside’s assets, including the Sunrise natural-gas field, for Shell’s holding.

Woodside shares have risen from this year’s March 15 low to A$47.26 on April 8 on speculation of a bid from BHP and an increase in gas demand following Japan’s nuclear crisis. BHP and Tokyo-based Mitsui & Co. and Mitsubishi Corp. may be potential buyers of Shell’s stake or of the entire company, Credit Suisse Group AG said in an April 7 report.

“If BHP buy the whole of Woodside and bolt it together with their own assets, I think they could look to make $3 or $4 billion worth of synergies out of this deal.

Woodside to get 23% premium

A $48.6 billion bid would represent a 23 percent premium to Woodside’s value, in line with the average premium paid for oil and gas assets worldwide in deals announced in the past 12 months.

While talks on Woodside have intensified in recent weeks, BHP is concerned that securing the support of Woodside’s management may be too costly.

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Weighing the Acquisition

More than half of BHP’s assets are in Australia, where the resources industry is undergoing its biggest boom in a century as Chinese demand for coal and iron ore climbs. Company announced in February it is still considering acquisitions after completed takeovers in the mining industry reached $80.7 billion in 2010. Also BHP is left with $16 billion of cash due to surging prices for iron ore, copper and oil.

“Asian LNG prices are the highest in the world, and Australia, being in relatively close proximity to Asia, acquisition would put BHP in strong position to sell to that market.

Woodside acquisitions and divestitures 

Year	Heading	Deal Value ($MM)
2009	Woodside divests 51.55% interest in Otway project for $641m	641.31
2007	Petronas acquires Mauritanian assets of Woodside Petroleum for $418m	418
2008	Woodside Petroleum acquires Shell's North West Shelf, Australia, oil assets for $399m	398.5
2008	Woodside Petroleum wins bids for 10 GoM blocks	89.85
2010	Woodside Petroleum divests Sierra Leone and Liberia assets to Anadarko	65
2007	Apache acquires Woodside's interests in certain Australian properties for $65m	65
2008	Origin Energy acquires remaining 62.5% interest in offshore Australia permit from Woodside Petroleum for $12m	12.2
2007	Karoon Gas acquires Woodside's interest in Australian permit for $0.9m	0.9
2010	Woodside acquires remaining 50% interest in offshore Australian permit from Hess
2010	Woodside acquires 65% interest in offshore Western Australia permit
2010	PTTEP acquires 20% interest in three permits offshore Western Australia
2009	Korea Gas to acquire interest in three offshore Australian permits from Woodside
2008	Woodside Petroleum awarded three exploration permits offshore Australia
2008	Anadarko acquires 50% interest in two blocks offshore Sierra Leone from RepsolYPF and Woodside
2008	Anadarko acquires 65% interest in three blocks offshore Liberia
2008	Woodside Petroleum and Reliance farm into Pluspetrol's exploration block in Peru
2008	Woodside farms out interest in three Australian exploration permits to Mitsui and Toyota Tsusho Corp
2008	Toyota Tsusho Corp acquires 7.5% interest in offshore Australian permit from Woodside and BHP Billiton
2007	Tokyo Gas and Kansai Electric acquire 5% stake each in Australian permit from Woodside
2007	Tokyo Gas Co to acquire 5% interest in Australia exploration permit from Woodside Petroleum
2007	Eni acquires 40% stake in two Timor Sea oilfields from Woodside Petroleum
2007	Woodside and Hess awarded exploration permit offshore Australia
2007	Woodside Petroleum sells 40.45% stake in offshore PNG lease to Merrill Lynch
2007	Tap Oil acquires 8.2% interest in Australian exploration permit from Woodside
2007	Woodside and KNOC jointly awarded  exploration blocks offshore South Korea
2006	Woodside acquires 25% interest in nine Brazil exploration blocks from Repsol YPF
2006	Repsol YPF farms into Woodside's offshore Kenya blocks
2006	Santos acquires additional interest in Australia gas field from Woodside
2006	Woodside, Total and Japan Australia LNG awarded two Australia exploration blocks

Source: Derrick Petroleum E&P Transactions Database

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More to be raised to fund APLNG JV

Origin is assessing a range of funding options for the joint venture, which includes tapping debt markets ,  conducting another equity raising and selling up to 7.5% interest in APLNG.

Origin and Conoco Phillips have agreed to sell LNG cargoes and 15% of the project to China's Sinopec, reducing their holdings to 42.5% each. Talks with other potential LNG buyers continue and that Origin expects to end up with more than 35% of the project's equity, but probably closer to 40%.  

Origin is optimistic about raising more through share issue after $2.3 billion capital raising

Origin Energy will raise 2.3 billion Australian dollars (US$2.32 billion) through share issue on the Australian market this year.Proceeds will reduce debt associated with the A$3.26 billion purchase of electricity assets privatized by the New South Wales state government.

Origin will continue to have Australia's strongest balance sheets

Origin already had one of Australia's strongest balance sheets after it sold a half share of its coal seam gas assets in Queensland state to U.S. oil major ConocoPhillips (COP) in 2007 for up to US$8 billion. By launching the raising early in 2011, Origin has been able to reinstate full year underlying profit guidance of around 15% growth, having lowered it last month to 10-15%, because paying off debt will reduce its interest bill. 

Shell Australia to sell down its remaining 24.27% stake in Woodside Petroleum worth approximately $8 billion; Is Shell losing interest because it is unable to acquire Woodside completely???

SHELL Australia chairwoman Ann Pickard says “We hoped Woodside would be the vehicle (to develop projects in Australia)  but when it became clear Woodside couldn’t be the vehicle we decided to develop our own projects”.  

Woodside holds interests in oil and gas assets in Australia, the Gulf of Mexico, Korea, and Brazil. Woodside’s principal assets in Australia include: Pluto LNG, Browse LNG, Sunrise LNG, North Rankin Redevelopment and North West Shelf Oil FPSO Replacement Project. 

The key highlights of Woodside include:

-- Woodside’s share of production for the quarter ended 31 Dec 2010: 17.688 MMBOE (Oil 41%)
-- 2010 year end reserves: Proved - 1.308 MMBOE, Proved plus Probable (2P) - 1.680 MMBOE (Gas-84%) and contingent resources - 1.814 MMBOE
-- 99% of 2P Reserves are in Australia and remaining 1% in GoM and other international areas.