Woodside Petroleum Limited

 Signed an agreement with BHP in relation to the Scarborough gas field:Woodside Petroleum Limited’s (ASX: WPL) stock gained some traction after WPL and BHP Billiton signed an agreement in relation to the proposed development of the Scarborough gas field. BHP has waived its right of pre-emption and provided its consent to the sale by ExxonMobil PL of its 50% interest in WA-1-R and the Scarborough Joint Venture Operating Agreement to WPL. This will result in WPL holding a 75% interest in Scarborough. Further, WPL will become the Scarborough operator after the completion of the transaction between ExxonMobil and Woodside. Moreover, WPL has granted BHP an option to purchase an additional 10% interest in Scarborough on equivalent terms to the transaction with ExxonMobil. This option can be exercised any time before December 31, 2019.
 
Additionally, WPL and BHP will undergo discussions for unitisation of WA-1-R and the adjacent WA-62-R (in which WPL and BHP each hold a 50% interest). They will also discuss potential offers to sell up to a 10% interest in the Scarborough project to foundation LNG buyers on a pro-rata basis. The discussion will also include technical and commercial arrangements for the Scarborough Development. On the other hand, WPL made an attempt to raise approximately A$2.5 billion through an Entitlement Offer to fund the acquisition of up to the additional 50% interest in the Scarborough gas field and for general corporate purposes. The group has closed the retail entitlement offer recently and later announced for completion of retail shortfall bookbuild as the final stage of the entitlement offer that raised gross proceeds of about $2.5 billion. Meanwhile, WPL stock has fallen 9.4% in three months as on March 12, 2018 and is trading at a reasonable level with further room for growth with Scarborough JV focussed on finalising the development concept before entering FEED (front end engineering and design) and gearing up for FID (Final investment decision) in 2020. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $28.86

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.