Woodside Doubles Gas Production After Taking Control of Field From Exxon

Australia’s Woodside Petroleum has taken on control of Exxon Mobil’s 50 percent interest in the Scarborough gas field off Western Australia doubling their gas production. Fellow Australian rival BHP Billiton cleared the way after waiving its right to pre-emption on the deal.

scarborough Field

With the deal Woodside increases its stake in Scarborough to 75 percent and becomes the operator of the gas field. In return for clearing the way $BHP has the option to buy into the Scarborough development on terms similar to those reached with Exxon.

The Scarborough field consists of three natural gas fields of more than 9 trillion cubic feet of dry gas. Upon completion of the acquisition, Woodside estimates its net share of resources more than doubles. BHP said last month it was anticipating bids for its onshore U.S. shale natural gas holding during the first half of the year.

Exxon reported $8.4 billion in earnings from exploration and production with most of that was a result of U.S. tax reforms that went into force this year. $XOM at its analyst day last week announced aggressive CapEx and earnings targets.

Woodside CEO Peter Coleman said in a statement

“I am pleased BHP has agreed that Woodside will become operator of the Scarborough development. The Scarborough joint venture will now be focused on finalizing the development concept prior to entering front-end engineering design and positioning for a final investment decision in 2020.”

Woodside reported a net profit after tax of nearly $80 million, an 18 percent improvement year on year. The companies free cash flow increased to $660 million.

Source: Woodside

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