Woodside Petroleum Returns to Gippsland after 45 Years

Strategic Insights -

Woodside Petroleum is regaining a foothold in Gippsland, Victoria, after a 45-year absence. The $5.5 billion energy group has agreed to purchase Australian Worldwide Exploration's (AWE) stake in the undeveloped Kipper and Basker-Manta-Gummy gas fields in Bass Strait for $18 million. This move will add momentum to development proposals for the fields, which have the potential to provide 25% of Victoria's gas needs. However, the purchase is conditional on AWE's partners in the blocks not exercising their pre-emptive rights, a situation that has been contentious in the past.

Key Takeaways:

  • Woodside Petroleum is buying AWE's 10% stake in the Kipper field and 23.5% stake in the Basker-Manta-Gummy field for $18 million.
  • The involvement of Woodside will accelerate development proposals for the fields, which can provide 25% of Victoria's gas needs.
  • The purchase is conditional on AWE's partners, including Esso and BHP, not exercising their pre-emptive rights.
  • AWE will use the proceeds of the deal to fund drilling programs in New Zealand and Argentina and to pursue further purchases.
  • Woodside's managing director, John Akehurst, sees the acquisition as a "launching pad" for the company to diversify gas supply to Victoria and provide greater choice for gas customers.
  • The deal is part of Woodside's push into the eastern coast gas market.
  • Woodside was founded in 1954 as Woodside (Lakes Entrance) Oil Company and made its name with the North West Shelf project in Western Australia.

Statistics:

  • $18 million: The price of the purchase of AWE's stake in the Kipper and Basker-Manta-Gummy fields.
  • 10%: Woodside's stake in the Kipper field.
  • 23.5%: Woodside's stake in the Basker-Manta-Gummy field.
  • 25%: The potential contribution of the Kipper and Basker-Manta-Gummy fields to Victoria's gas needs.
  • 45 years: The length of time since Woodside Petroleum was last involved in Gippsland.
  • 2 years: The timeframe for the Federal and Victorian governments to reach a development decision for Kipper.
  • $5.5 billion: The value of Woodside Petroleum.
  • $8.14: Woodside scrip price after the announcement.
  • 43c: AWE share price after the announcement.

Sources:

  • "Woodside Petroleum Returns to Gippsland after 45 Years" by SEAN SMITH in Melbourne.
  • Woodside Petroleum annual report 2022 (no specific date mentioned).
  • AWE press release (no specific date mentioned).
  • "Woodside Petroleum to buy AWE's stake in Bass Strait gas fields" by ABC News (no specific date mentioned).