Woodside has reached an agreement with Chevron for an asset swap, which will significantly reshape the company’s portfolio and streamline its Australian operations. The swap will involve the acquisition of Chevron’s interest in several key projects, while Woodside will transfer its interests in two other major assets.
Key Transaction Highlights:
- Woodside’s Acquisition: Woodside will acquire Chevron’s 16.67% interest in the North West Shelf (NWS) Project, the NWS Oil Project, and a 20% interest in the Angel Carbon Capture and Storage (CCS) Project.
- Woodside’s Disposals: In exchange, Woodside will transfer its 13% non-operated interest in the Wheatstone Project and its 65% operated interest in the Julimar-Brunello Project to Chevron.
- Cash Payment: Chevron will make a cash payment to Woodside of up to $400 million, comprising a $300 million payment upon completion and additional contingent payments of up to $100 million based on the successful handover of the Julimar Phase 3 Project and subsequent production performance.
Strategic Rationale:
- Streamlined Portfolio: The asset swap simplifies Woodside’s Australian portfolio, consolidating its focus on operated LNG assets. This streamlining enhances the company’s ability to optimize its operations and manage its assets more efficiently.
- Economic Recovery: The swap provides greater opportunities for the economic recovery of existing production and opens up future development prospects within the North West Shelf. It also creates a more aligned and efficient joint venture structure for the proposed Browse to North West Shelf Project.
- Strengthened Cash Flow: This transaction is immediately cash flow accretive and supports near-term cash flows, which will benefit shareholder distributions and ongoing investments in future projects, such as decarbonisation opportunities at the Karratha Gas Plant and further development of the Angel CCS Project.
Transaction Conditions:
- The effective date of the transaction is 1 January 2024, but the completion is subject to customary conditions, including regulatory approvals and third-party consents. The final close of the transaction is anticipated for 2026, after the Julimar Phase 3 Project execution phase and other necessary activities.
- Chevron’s Payments: Along with the cash payment at completion, Chevron will also provide a $100 million advance to Woodside at the time of transaction execution, refundable if the deal does not complete.
CEO Statement:
Woodside CEO Meg O’Neill expressed that the transaction’s rationale is compelling, as it enhances the company’s strategic focus and drives value by improving its position in core operated LNG assets. O’Neill further noted that the deal also benefits from strong support for decarbonisation and carbon capture projects, underscoring the long-term sustainability of Woodside’s evolving portfolio.
