Woodside sees slim risk of big share selloff by BHP investors By Reuters

© Reuters. The logo of Woodside Petroleum, Australia’s leading independent oil and gas company, is being screened at an investor briefing in Sydney, Australia on May 23, 2018. REUTERS / David Gray / Files

By Sonali Paul

MELBOURNE (Reuters) – Woodside (OTC 🙂 Petroleum does not expect a big sale of the company’s shares by BHP Group (NYSE 🙂 investors if Woodside’s acquisition of BHP’s oil business continues in June, executive director Meg O’Neill said Tuesday.

Woodside shareholders will vote on a $ 40 billion merger on Thursday to create one of the top 10 independent global oil and gas producers. BHP shareholders will have a 48% stake in the expanded group called Woodside Energy.

There have been concerns that investors who own BHP shares but do not currently own Woodside may try to dump the Woodside shares that will be issued under the agreement.

However, O’Neill said his talks with BHP shareholders were going “very well” to explain the expected performance of the expanded group, its capital management framework and the strength of the balance sheet.

Woodside has also been speaking with U.S. investors to highlight the differences between him and his independent U.S. counterparts, which focus on shale and oil production, as opposed to liquefied petroleum and gas (LNG) assets. of Woodside.

“At the end of the day, we believe that there will be a demand for Woodside shares that exceeds the available supply. Therefore, we believe that the risk of return is largely mitigated,” O’Neill told reporters outside the Australian Petroleum Production and Exploration Association Annual Conference.

“But having said that, I recognize that this is an important transaction. We are issuing a large number of new stocks, so we expect to see some volatility over the next few months. But I don’t think that’s the case. Lasting.”

He said only a small number of BHP shareholders are in jurisdictions where they will not be able to hold Woodside shares, such as South Africa.

Assuming the deal goes ahead, Woodside is well positioned to benefit European and Asian buyers looking for alternatives to Russian supply, which has been slashed by sanctions.

O’Neill told Reuters that the company’s $ 4.6 billion Sangomar oil project in Senegal, where the company has been seeking to sell its 82% stake since July, has aroused “a little more interest” in the wake of the conflict in Ukraine.

“Obviously, with commodity prices where they are, people see short-term opportunities for that asset,” he said.

Sangomar, which will be launched in 2023, will produce sour crude similar to Russian Urals crude used by European refineries.

“So we expect a lot of interest in the market from European refineries for Senegalese grades,” O’Neill told Reuters.

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