Woodside chief Meg O’Neill has dampened expectations of a merger between Australia’s largest oil and gas company and rival Santos, saying talks remain at an “early stage”.
Speaking as Woodside reported record production in 2023, O’Neill said talks were ongoing but there was no certainty of a deal being reached. News of preliminary discussions between the two firms was first revealed in December.
“The talks are still at an early stage and there is no certainty that the transaction will progress,” O’Neill said.
“Woodside will be disciplined, conduct thorough due diligence, and will only pursue a transaction that is value-accretive for shareholders.”
Woodside hit record production in 2023, its first full year with the assets it bought from BHP, hitting the top end of guidance to investors.
However, December quarter production was seven per cent less than a year ago, and the quarterly revenue of $US3.26 billion ($4.95 billion) was 35 per cent down as world gas markets normalised from sky-high prices after Russia invaded Ukraine two years ago.
Output in December from Woodside’s half-share in ExxonMobil’s Bass Strait operation that supplies about 40 per cent of the east coast’s gas needs crashed 34 per cent from a year ago. The two companies struck an agreement with the federal government this week for additional production through to 2033.
December quarter production for Woodside’s foundation asset the North West Shelf LNG project was down 20 per cent from a year ago as flow from its gas fields declined. Woodside plans to permanently close one of the project’s five LNG production trains this year.
Woodside’s 2023 production was equivalent to 187.2 million barrels of oil, close to the higher end of its guidance of 183 million to 188 million barrels.
O’Neill said the Perth-based company was on track in delivering new projects.
Its flagship Scarborough to Pluto gas project was 55 per cent complete.
“We’ve already completed the seismic survey, nearshore pipe-lay installation is almost complete and we’ve commenced pipe-lay work in Commonwealth waters,” she said.
Environmental approvals for Scarborough had been held up by direct legal action and additional consultation with stakeholders to reduce the risk of litigation similar to the actions that have plagued Santos’ Barossa project.
Woodside started drilling into the Scarborough gas reservoir this month.
Woodside also said that Ashok Belani, a petroleum engineer who had a 43-year career with oil and gas exploration services company SLB, had joined its board.
Belani will continue to advise SLB, where O’Neill’s predecessor as Woodside chief executive Peter Coleman sits on the board. Belani will stand for election at Woodside’s May annual general meeting where the company’s climate plan will be put to a non-binding vote two years after it suffered a record no vote of almost 50 per cent.
Woodside shares were flat in early trading on Wednesday morning.
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Source: Thanks smh.com