Woodside seals $2.8-bn Apache deal
04 April 2015
Australian oil and gas major Woodside Petroleum on Thursday closed the acquisition of US energy giant Apache Corp's stakes in Australian liquefied natural gas (LNG) and oil assets for $2.82 billion, and said that the purchase of Kitimat LNG project in Canada is expected to close next week.
With this, Perth-based Woodside has acquired a 13-per cent stake in the $29-billion Wheatstone LNG project operated by US oil and gas giant Chevron Corp, a 65-per cent interest in the Julimar-Brunello upstream gas development, and another 65-per cent stake in the Balnaves oil project.
The price includes $567 million closing adjustment representing Apache's net expenditures in the above projects.
Earlier, in December, Woodside entered into a deal to buy Apache's Australian assets as well as its interests in Kitimat LNG project in British Columbia in Canada for a total price of $2.75 billion and an expected closing adjustment of approximately $1 billion. (See: Apache to sell stakes in two international projects to Woodside for $2.75 bn)
The Kitimat transaction is expected to cost approximately $854 million, including the closing adjustment of $354 on account of Apache's investment in the project. Woodside will acquire 50-per cent interest in the project, including about 320,000 acres of prospective land in the Horn River and Liard Basins. Chevron holds the remaining 50 per cent interest in Kitimat LNG.
Some analysts doubt the prospects of Kitimat LNG project amid the slump in crude oil prices in recent months. However, Woodside said that it will add a ''growth option in an emerging LNG province to the company's development portfolio.''
Overall, the total value of deal is expected to be slightly lower at $3.67 billion compared to the initial $3.75 billion.
The Wheatstone LNG project in Western Australia is expected to be commissioned late next year, while the Balnaves oil field off the WA coast will give immediate boost Woodside's production.
Woodside said it would update its 2015 production, capital expenditure and reserves once the Canadian transaction closes next week.
It has been reported that Apache is seeking to sell its other assets in Western Australia, including its stakes in gas processing hubs in Varanus Island and Devil Creek, and upstream oil and gas fields and talks are going on with interested parties.