Woodside Energy (ASX:WDS) announced an asset swap with Chevron. This agreement will allow Woodside to strengthen its position in the North West Shelf (NWS) projects in Western Australia, while divesting its interests in the Wheatstone and Julimar-Brunello projects.
The transaction also includes a cash payment of up to $400 million from Chevron.
Details
Woodside will acquire Chevron’s 16.67% interest in the NWS Project, its 16.67% interest in the NWS Oil Project and a 20% interest in the Angel Carbon Capture and Storage (CCS) Project.
In exchange, Woodside will transfer its 13% interest in the Wheatstone project and its 65% interest in the Julimar-Brunello project to Chevron.
Woodside will receive an initial $100 million advance from Chevron upon consummation of the transaction. Upon completion, Woodside will receive an additional cash payment of $300 million, as well as contingent payments of up to $100 million based on the performance of the Julimar Phase 3 project.
The transaction is expected to be finalized in 2026, following regulatory approvals and the completion of certain operational milestones, including the completion of phase 3 of the Julimar project.
Impact on Woodside’s portfolio
- NWS Project: Woodside’s interest in the NWS liquefied natural gas (LNG) project will increase from 33.33% to 50%.
- NWS Oil Project: Woodside’s stake will increase from 50% to 66.67%.
- Wheatstone: Woodside will completely abandon its unoperated 13% stake in the Wheatstone project, which processes gas from offshore fields including Julimar and Brunello.
- Julimar-Brunello: Woodside will transfer its 65% interest in the Julimar-Brunello gas fields but will retain operational control until the completion of the Julimar Phase 3 project, scheduled for delivery in 2026.
- Angel CCS Project: Woodside’s stake will double from 20% to 40%, strengthening its position in the carbon capture and storage sector.
These changes result in a net increase of 9.6 million barrels of oil equivalent (MMboe) to Woodside’s proven and probable (2P) reserves.
Strategic Rationale
Woodside chief executive Meg O’Neill said: “The strategic and commercial rationale for this asset swap is compelling for Woodside. It simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets. It generates cash flow immediately and includes cash payment both upon execution and completion.
Woodside shares closed down 1.91% yesterday at $23.10.
