Woodside Energy could land a $1bn windfall after putting two major West Australian oil and gas facilities on the market, signalling it will sever ties with several high profile BHP-owned assets picked up from its $40bn merger deal with the mining giant.
The energy producer will field offers for its Pyrenees and Macedon oil and gas projects in WA’s Carnarvon Basin, the latter of which is a major supplier to the state’s domestic gas industry.
Woodside has hired Morgan Stanley as its exclusive financial adviser on the sale, according to the flyer obtained by The Australian, in a deal which sources said could be worth up to $1bn.
It will look to sell all of its stake in the two projects, comprising a 71.4 per cent interest in the Macedon field and a 62 per cent share of Pyrenees along with operator status. The assets have sustained production into the mid 2030s, although Woodside took a $US68m writedown on Pyrenees at its results this week.
Expected buyers are likely to include Santos, which owns 28.6 per cent stakes in both of the facilities, along with Japan’s Inpex which has a smaller 9.4 per cent share of Pyrenees. SA player Beach Energy, which has operations in WA, may also consider an offer, sources said.
“Macedon and Pyrenees are well understood, mature and cash generative assets with proved and probable reserves of 75 million barrels of oil equivalent net to Woodside’s share”, the flyer said.
The mooted sale may spark concern among WA industry given tight supplies of gas in the domestic market and contract prices above a $12 per gigajoule price cap in place on the east coast.
Wesfarmers has called for “urgent action” to boost domestic gas supply by insisting volumes are brought to market “without delay” in a bid to fight off the current crunch.
Woodside notes Macedon is “strategically important” to energy supply in WA, supporting strong domestic gas supply for the market.
The flyer touts the Pyrenees field, which started up in 2010, as a collection of offshore heavy oil fields in the Exmouth sub-basin with crude offloaded from a floating production unit directly to tankers for transport to international markets.
Some 13.3 million barrels of oil equivalent of remaining reserves are in place.
“Australia’s political stability, transparent regulatory system and sound governance frameworks provide a low-risk jurisdiction for investment,” Woodside said.
Both the Macedon and Pyrenees projects were picked up as part of Woodside’s blockbuster tie-up with BHP Petroleum, a merger which catapulted the company into the top 10 oil and gas producers in the world with assets spread across both the west and east coasts of Australia, the Gulf of Mexico and Trinidad.
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