Woodside offers $8 billion for Oil Search
MELBOURNE, September 8, 2015 – Australian exploration and production company Woodside is in talks to acquire Oil Search, the largest producer in Papua New Guinea, for a reported AUD11.6 billion ($8.1 billion). Woodside confirmed the offer in a Tuesday press release.
As Woodside has no projects slated for development in the next few years, acquiring Oil Search would boost growth by about 30 percent, and would be much cheaper to develop than Woodside’s LNG proposals in Canada and Australia.
Oil Search holds 29-percent stake in the PNG LNG project, and a 23-percent stake in the country’s largest undeveloped gasfields, the Elk and Antelope fields. Oil Search also holds a 60-percent stake in the Taza field, in the Kurdistan Region of Iraq, and a 100-percent operatorship of the Tajerouine field permit in Tunisia.
Woodside’s offer of AUD7.64 per share is seen as a low offer, since the Papua New Guinean government, Oil Search’s largest shareholder, bought into the company at AUD8.10 per share last year. After news of the offer broke, Oil Search’s share price jumped to AUD7.90 as of Tuesday morning.
ExxonMobil, which operates the PNG LNG project, as well as a few other multinational corporations may make a rival bid.
“The proposal is subject to Papua New Guinea regulatory approval, completing satisfactory due diligence and other customary conditions,” Woodside said in a statement to the Australia Securities Exchange.
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