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BHP GOES GREEN: Is this the end of BHP’s oil and gas?

https://au.finance.yahoo.com/news/bhp-woodside-oil-gas-072507552.html

looks like BHP has found a way into the dust-bin of history as well

top up price reduced to $11

Potash is a tax write down , South American iron still a disaster , starting to look a lot like RIO ( an incredible shrinking company )

how bad was Kloppers again , millions will be wasted in this extensive restructure to remove BHP PLC ( the very complex structure that stopped them from being a viable take-over target )
 
Woodside and BHP to create a global energy company
Woodside Petroleum Ltd (“Woodside”) and BHP Group (“BHP”) have entered into a merger
commitment deed to combine their respective oil and gas portfolios by an all-stock merger (the
“Transaction”) to create a global top 10 independent energy company by production.
On completion of the Transaction, BHP’s oil and gas business would merge with Woodside,
and Woodside would issue new shares to be distributed to BHP shareholders. The expanded
Woodside would be owned 52 per cent by existing Woodside shareholders and 48 per cent by
existing BHP shareholders. The Transaction is subject to confirmatory due diligence,
negotiation and execution of full form transaction documents, and satisfaction of conditions
precedent including shareholder, regulatory and other approvals.
With the combination of two high quality asset portfolios, the proposed merger would create
the largest energy company listed on the ASX, with a global top 10 position in the LNG industry
by production. The combined company will have a high margin oil portfolio, long life LNG
assets and the financial resilience to help supply the energy needed for global growth and
development over the energy transition.
Attractive strategic and financial rationale
The combination of Woodside and BHP’s oil and gas business is expected to deliver
substantial value creation for both sets of shareholders from across a range of areas, including:
• Greater scale and diversity of geographies, products and end markets through an attractive
and long-life conventional portfolio
• Resilient, high margin operating cash flows to fund shareholder returns and business
evolution to support the energy transition
• Strong growth profile with a plan to achieve targeted Scarborough FID in the 2021 calendar
year and capacity to phase the most competitive, high-return options within the portfolio
• Proven management and technical capability from both companies
• Shared values and focus on sustainable operations, carbon management and ESG
leadership
• Estimated synergies of more than US$400 million (100 per cent basis, pre-tax) per annum
from optimising corporate processes and systems, leveraging combined capabilities and
improving capital efficiency on future growth projects and exploration
• Greater financial resilience, relative to Woodside’s and BHP’s standalone petroleum
businesses.
2
Woodside CEO and Managing Director Meg O’Neill said, “Merging Woodside with BHP’s oil
and gas business delivers a stronger balance sheet, increased cash flow and enduring
financial strength to fund planned developments in the near term and new energy sources into
the future.
“The proven capabilities of both Woodside and BHP will deliver long-term value for
shareholders through our geographically diverse and balanced portfolio of tier 1 operating
assets and low-cost and low-carbon growth opportunities.
“The proposed transaction de-risks and supports Scarborough FID later this year and enables
more flexible capital allocation. We will continue reducing carbon emissions from the combined
portfolio towards Woodside’s ambition to be net zero by 2050.”
BHP CEO Mike Henry said, “The merger of our petroleum assets with Woodside will create an
organisation with the scale, capability and expertise to meet global demand for key oil and gas
resources the world will need over the energy transition.
“Bringing the BHP and Woodside assets together will provide choice for BHP shareholders,
unlock synergies in how these assets are managed and allow capital to be deployed to the
highest quality opportunities. The merger will also enable the skills, talent and technology of
both organisations to build a resilient future as the world’s needs evolve.”
Greater scale and diversity of geographies, products and end markets to create a longlife conventional portfolio
This Transaction delivers significant benefits for both Woodside and BHP shareholders by
creating a long-life conventional portfolio of scale and diversity of geography, product and end
markets.
On a proforma basis, the combined business will consist of:
• High quality conventional asset base producing around 200 MMboe (FY21 net production)
• Diversified production mix of 46% LNG, 29% oil and condensate and 25% domestic gas
and liquids (FY21 net production)
• Wide geographic reach with production from Western Australia, east coast Australia, US
Gulf of Mexico, and Trinidad and Tobago with approximately 94% of production (FY21 net
production) from OECD nations
• 2P reserves of over 2 billion boe comprising 59% gas, and 41% liquids.
Resilient operating cash flows to fund shareholder returns and business evolution to
support the energy transition
Significant operating cash flow will support continued strong returns to shareholders over time.
Woodside will maintain its focus on disciplined growth investment and continued dividends. It
is expected that Australian shareholders will benefit from the distribution of Woodside’s
significant franking credit balance.
Strong growth profile with a plan to achieve targeted Scarborough FID in 2021 and
capacity to phase high-return options
The Transaction will deliver expanded growth optionality for shareholders with the flexibility to
phase and selectively progress near and longer term high-return options.
3
Woodside and BHP have developed a plan to targeted final investment decision (FID) for
Scarborough (Australia) by the end of the 2021 calendar year, prior to the proposed completion
date for the merger.
As part of this plan, Woodside and BHP have agreed an option for BHP to sell its 26.5 per cent
interest in the Scarborough Joint Venture to Woodside and its 50 per cent interest in the Thebe
and Jupiter joint ventures to Woodside if the Scarborough Joint Venture takes a FID by 15
December 2021. The option is exercisable by BHP in the second half of the 2022 calendar
year and if exercised, consideration of US$1 billion is payable to BHP with adjustment from an
effective date of 1 July 2021. An additional US$100 million is payable contingent upon a future
FID for a Thebe development.
The Atlantis Phase 3 (US), Mad Dog Phase 2 (US), Shenzi North (US) and Sangomar Field
Development Phase 1 (Senegal) projects remain on budget and on track, and along with
significant brownfield expansion options, provide opportunity for near- and medium-term
growth.
Longer term embedded options include the Wildling (US), Trion (Mexico), Calypso (Trinidad
and Tobago) and Browse (Australia) projects. These options offer significant potential growth
coupled with multiple exploration opportunities and partnerships.
Proven management and technical capability from both companies
The combined business will benefit from the joint management and technical petroleum
expertise of both companies, led by Meg O’Neill as the CEO and Managing Director. Leading
HSE performance, LNG production and marketing, deepwater oil development and production,
exploration success, and international experience will come together to create a differentiated
set of capabilities. These capabilities are further supplemented through investments in
technology and low carbon solutions, and strong governance systems. In addition, it is
intended that the Woodside Board will appoint a current BHP director as a Woodside director
on completion.
Shared values and focus on sustainable operations, carbon management and ESG
leadership
The combined business will continue to have an unrelenting focus on safe, sustainable and
reliable operations, building on Woodside’s and BHP’s strong track records.
It will build on Woodside’s existing targets to reduce net emissions by 15 per cent and 30 per
cent by 2025 and 2030 respectively, on the pathway to its ambition of net zero by 2050,
applying these to the combined portfolio. Progress will be reported on both an operated and
non-operated equity emissions basis.
In support of the goals of the Paris Climate Agreement, and to contribute to the energy
transition, the combined business will focus on building and maintaining a high return and
carbon-resilient portfolio which includes natural gas and new energy technologies.
The combined business is expected to generate significant cash flow this decade to support
the development of new energy products and low carbon solutions including hydrogen,
ammonia and carbon capture and storage (CCS).
Synergies and benefits
This merger of highly complementary asset portfolios is expected to unlock material synergies.
Woodside and BHP have estimated annual synergies to be in excess of US$400 million per
annum (100 per cent basis, pre-tax).
4
These synergies are anticipated to come from:
• Optimising corporate processes and operating costs across the entire portfolio
• Leveraging the leading petroleum capabilities of both organisations including technology,
operating, sales and marketing, infrastructure and resource development expertise
• Optimising spend on exploration and future growth projects through the development of
combined and more capital efficient opportunities.
Greater financial resilience, relative to Woodside and BHP’s standalone petroleum
business
On completion of the Transaction, the combined business’ balance sheet will be strengthened
by the resilience the merged portfolio delivers through the cycle. On a proforma basis (12
months to 30 June 2021), the combined business will have:
• A large earnings base with revenue of more than US$8 billion and EBITDA of US$4.7 billion
• Operating cash flows of more than US$3 billion supported by resilient foundation assets
• A strong balance sheet reflected with low gearing of 12%.
Merger mechanics
Under the proposed transaction, Woodside, or a wholly owned subsidiary of Woodside, will
acquire 100 per cent of the issued share capital of BHP Petroleum International Pty Ltd in
exchange for shares in Woodside which will deliver 48 per cent to BHP shareholders on
completion. Woodside shares will be immediately distributed to BHP shareholders. Woodside
will remain listed on the ASX with listings on additional exchanges being considered.
Both the Woodside and BHP boards of directors confirm their support for the Transaction. The
merger is expected to be completed in the second quarter of the 2022 calendar year with an
effective date of 1 July 2021.
The Transaction is subject to confirmatory due diligence, negotiation and execution of full form
transaction documents which is targeted for October 2021, and satisfaction of conditions
precedent including shareholder, regulatory and other approvals. Under the merger
commitment deed, each party has agreed to pursue a merger transaction and agreed to certain
exclusivity arrangements and to each pay a reimbursement fee of approximately
US$160 million in certain circumstances.
Woodside’s financial advisers are Gresham Advisory Partners Limited and Morgan Stanley
Australia Limited, and its legal advisers are King & Wood Mallesons and Vinson & Elkins LLP.
BHP’s financial advisers are J.P. Morgan, Barclays and Goldman Sachs and its lead legal
adviser is Herbert Smith Freehills.


======================================================================================================

DYOR

i hold BHP and WPL
 

BHP reports best profit in nearly a decade, pays record dividend​


au.finance.yahoo.com

BHP reshapes portfolio, set to quit London's FTSE

MELBOURNE (Reuters) -BHP Group reported its best annual profit in nearly a decade on soaring iron ore prices, as the world's biggest listed miner announced an exit from its $13 billion petroleum business in a portfolio shake-up that will see it leave London's FTSE100 index. On a day of sweeping...
au.finance.yahoo.com au.finance.yahoo.com



BHP Plans to Scrap Dual Listing to Make Sydney Primary Venue​


au.finance.yahoo.com

BHP Plans to Scrap Dual Listing to Make Sydney Primary Venue

(Bloomberg) -- BHP Group said it plans to unify its dual-listing structure and would have its primary listing in Sydney.The world’s biggest miner announced the change to its structure as part of its annual earnings results Tuesday, confirming an earlier Bloomberg News report. The proposal would...
au.finance.yahoo.com au.finance.yahoo.com

BHP
down
$51.33 -$0.74 (-1.4%) at the close of trade
 
i disagree ,

that tangle of a dual-listing made a take-over very difficult

remember some big corporations have access to unlimited credit ( Blackrock as just one example )

relying on FIRB and ACCC to protect Australian shareholders , has been a very quirky tactic in recent years

and my regular disappointment in WPL has been mentioned elsewhere here , remember a big piece of the existing assets were swindled away from East Timor ( or Indonesia if we had not cynically liberated East Timor )

time will tell if WPL picks some quality staff out of the BHP projects

a shrinking BHP and unlimited borrowing capacity ( for some )

will tempt some

BHP might still be too large for Glencore ( watch to see if they make a move on RIO )

M&A activity still hotting up ( globally )
 
This amused me:
Shareholders in the Plc company listed in London will be taken onto the Australian register and their shares will be quoted here in Australian dollars. They will get Australian shares on a one for one basis.
Click to expand...

Many UK institutions won’t like that because of the currency changes – the London shares are quoted in sterling. London holders will whine in moan through the likes of the Financial Times, and other UK media.
Click to expand...
Good time to buy them out. At almost nil premium ?
 
maybe we aren't so ESG addicted

also all the recent investment in oil/gas MIGHT have been better used in South American copper , are accelerating Olympic Dam

wasn't so long back they increased the interest in Gulf of Mexico assets
 
divs4ever said:
maybe we aren't so ESG addicted

also all the recent investment in oil/gas MIGHT have been better used in South American copper , are accelerating Olympic Dam

wasn't so long back they increased the interest in Gulf of Mexico assets
Click to expand...
Those investments aren't disappearing, you will still own them if you keep the WPL shares, or if you sell them its like getting those assets back in cash.
 
Value Collector said:
Those investments aren't disappearing, you will still own them if you keep the WPL shares, or if you sell them its like getting those assets back in cash.
Click to expand...
but some management teams are better at cost-effective profits than others , and lets face it WPL ( who is not known for repeated guidance beats ) will be doubling the assets they have to manage

Australia has some awesome management teams ( MIN and FMG to name just two ) but only a few can handle a sudden doubling of the business effectively
 

BHP IS 'INCREDIBLY GOOD AT FORECASTING THE FUTURE': GREENWOOD​




yes i noticed the Vanguard posturing ( with clients funds ) ( and their willingness to lend shares to short-sellers )

so i am looking to off-load my holdings in VAS and VHY ( held since 2011 ) , and do not hold a formal super fund

will i add more BHP in the future , that will depend on how much the share price falls
 
divs4ever said:
but some management teams are better at cost-effective profits than others , and lets face it WPL ( who is not known for repeated guidance beats ) will be doubling the assets they have to manage

Australia has some awesome management teams ( MIN and FMG to name just two ) but only a few can handle a sudden doubling of the business effectively
Click to expand...
I don’t know much about WPL’s management, but I know BHP has some good Oil men, hopefully the BHP Oil men come across to WPL and continue in their jobs.
 
divs4ever said:

BHP IS 'INCREDIBLY GOOD AT FORECASTING THE FUTURE': GREENWOOD​




yes i noticed the Vanguard posturing ( with clients funds ) ( and their willingness to lend shares to short-sellers )

so i am looking to off-load my holdings in VAS and VHY ( held since 2011 ) , and do not hold a formal super fund

will i add more BHP in the future , that will depend on how much the share price falls
Click to expand...

Is that a joke? ?
 
waterbottle said:
Asx no likey... Not sure why...
Click to expand...
The 7 per cent decline in the BHP share price on Wednesday was attributed to arbitrage traders closing the gap between the discounted London share price and the Australian share price, which trades at a premium because of franking credits.

Putting to one side this short term impact, there is a positive double whammy from the changes in the index weightings contemplated by BHPs removal of its dual listing. Index funds and other passive strategies will automatically buy more BHP shares to match the increased index weighting in Australia, and active managers will be forced to buy the stock because of the impact the index changes will have on benchmarks.


new BHP could be 12% of ASX200, CBA at 9% and CSL getting up to 7%. Top3 will be > 25% of the index... and new WPL will be about 2%.
 
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