WDS - Woodside Energy Group

[Dona Ferentes]

Am I reading a few of these wrong? @Miner @Austwide . BHP and WPL aren't merging. BHP petroleum assets are going into wpl, and BHP shareholders are receiving WPL scrip so the new Woodside will be much bigger with new and old, a lot of overlapping, shareholders. Among the details not yet revealed is what proportion will BHP assets be in the new WPL .

 

[Miner]

maybe they are still untangling the complexities of the deal

just the portfolio shifts required by various ETFs will be immense , and then we will have the LICs trying to work out their moves

remember SOME are following the ESG fad , while others will be trying to re-estimate div. yields , and rebalancing the indexes

for instance would you really want a UK focused index fund with it lacking BHP PLC , and in the mess the UK is in not to mention how BP would have to re-invent itself , for the 'Green new deal '

i think key to the WPL deal is how many of the BHP move across to the new company .

but i guess time will tell
BUT if BHP keeps sliding ..... maybe i had better calculate a firm target price , just in case a market shock provides an opportunity , having that order in weeks early has worked for me before ( maybe it will again )

Thanks Pete.
I realise bhp makes billions and wastes billions too.
So all those people on the board earning millions and backed by 100s analysts if not 1000s, worldwide would have done their Sun in recommending not to dip in hot potato like Petrol only to be exploded.
Fossil fuel is ready to go with EV and excepting Australia nuclear powered power generation will soon take over coal fired and co gen power stations.
But if bhp model fails those top cats would finish as well.
Hence my question.

Am I reading a few of these wrong? @Miner @Austwide . BHP and WPL aren't merging. BHP petroleum assets are going into wpl, and BHP shareholders are receiving WPL scrip so the new Woodside will be much bigger with new and old, a lot of overlapping, shareholders. Among the details not yet revealed is what proportion will BHP assets be in the new WPL .

@Dona Ferentes you could be right. At least myself wrongly read or misread the bhp wpl news.
Would re do my research .
A big thanks.

 

[aus_trader]

I think @Dona Ferentes is on the money that this is more of a re-structure/merger of assets than a merger of two companies.

 

[divs4ever]

If I am WPL holder, would not be a great deal for me considering highest risk on Pluto and others will be reduced. BHP has lots of cash and hopefully after one and two years teething problem post merger, it will be a great giant . Yes, immediate post merger gives punters opportunity to buy BHP . Allan Gray is however very prudent fundi and what I do not know if the comment from Simon, is from BHP perspective and what are they telling to their clients holding WPL ?
Do hold BHP and looking for sneaking into WPL

now i MIGHT be wrong here but as i read it , you are only getting BHP Petroleum ( which apparently includes gas assets ) which is only FIVE PERCENT of BHP ( either the total or just BHP Ltd )

so i do NOT expect WPL to get much access to the BHP war-chest , but MAYBE WPL will get the opportunity to hire extra top quality staff , and probably some oil/gas related plant ( and spare parts for that plant ) ( and the BHP research into oil/gas project that have caught their eye without pulling the trigger )

my concern with WPL is it was making hard work of maximizing their existing projects ,

compare that to BPT which merged with Drillsearch and then not long after acquire a fair amount of the ORG assets , and did so without choking , can WPL do similar .

i won't be looking to automatically off-load the ( new ) WPL but i do expect some teething problems and asset value write-downs and some possible cheap prices

lets call WPL a $20 share and say 20% of the new issue will be up for sale quickly ( and of course some more will be lent to short sellers by other instos ) so what chance some opportunity of WPL at say $10 a share , because the near future economy is riddled with uncertainty and active traders will see a lot of volatility , WPL AND oil/gas

but the modern BHP bowing to Elliot ( and friends ) pressure makes me rather uneasy

Elliot has about 1% influence ( so BHP claims ) and say Blackrock and Vanguard have another 12% vote between them

next these funds will start demanding multiple seats on the board ( like some super funds do ) without bringing any boost in skills related to the business

 

[Dona Ferentes]

I think @Dona Ferentes is on the money that this is more of a re-structure/merger of assets than a merger of two companies.

and apologies to Austwide, it was aus_trader I was replying to.

The hard work has now to be done; sit down, look at everything, agree what they have got, and on a price and a DCF and lifespan for each asset. Toss them all in the mix. Come out with a value that then attributed to BHP Petroleum, divide by # of shareholders and give them WPL shares proportionally. Some are talking 50:50, or 53:47 or 47:53. No-one will be happy. Just another Corporate Action the global investment banks

 

[Garpal Gumnut]

I'm actually quite bullish on oil and gas.

With the present disorder it will take half a century to electrify vehicles.

Who knows another mini Ice Age could even make a need for a warmer planet.

The futurists seem too set in their predictions for my liking.

WPL could be a an unlikely winner.

gg

 

[aus_trader]

I'm actually quite bullish on oil and gas.

With the present disorder it will take half a century to electrify vehicles.

Who knows another mini Ice Age could even make a need for a warmer planet.

The futurists seem too set in their predictions for my liking.

WPL could be a an unlikely winner.

gg

So any reason why WPL unlikely to be a winner if you share the view of being bullish on Oil/Gas ?

 

[divs4ever]

well let's say the world will need about half a billion electric vehicles ( maybe more if mobility scooters become affordable )

that is an awful lot of battery , which don't last forever , even allowing for battery recycling that is plenty of demand for resources and technology that is far from perfect

say EVs ( with nearly all vehicles being EV ) by 2030 looks like a tall task

now for WPL to perform poorly i would point no further than the WPL history
that doesn't mean it can't improve ( and the BHP deal would be a good chance to upgrade staff and skills )

now bullish on oil/gas is very much about supply ( of lack of it ) remember how many oil nations that have limited production , Libya , Syria , Venezuela , Nigeria ( arguably Iran , but who knows if Iran sells everything to China and North Korea ) , Iraq probably hasn't repaired all it's oil production , and then we all those tankers that are tied up in the wrong place

to me i think oil should be closer to $US 50 currently , thinking demand is still below 2019 levels

 

[Smurf1976]

IMO oil/gas companies will go the way of AGL and the dodo bird.

As someone with more knowledge on the physical side when it comes to energy than of corporate finances, I suspect you're right but I also question why.

Physically there's a major push to "electrify everything" and that means more electricity not less as transport, space heating and so on ultimately goes electric. The means of generating electricity is changing but electricity itself sure isn't going away.

Short term, and by that I mean the next few years, bulk gas consumption is also clearly trending up globally. Apart from 2020 (pandemic) and 2009 (GFC downturn) gas volumes globally have gone up every year for a very long time.

Also there's not yet a decline in physical oil consumption if we exclude pandemic-related factors of grounded aircraft etc.

If these companies aren't making money out of that then to me that raises some questions as to management decisions and so on. Ultimately a declining market will shrink the oil and gas business yes but it hasn't happened yet, the industry's very near its all time high (and would be at an actual high if not for the pandemic).

 

[qldfrog]

As someone with more knowledge on the physical side when it comes to energy than of corporate finances, I suspect you're right but I also question why.

Physically there's a major push to "electrify everything" and that means more electricity not less as transport, space heating and so on ultimately goes electric. The means of generating electricity is changing but electricity itself sure isn't going away.

View attachment 129193

Short term, and by that I mean the next few years, bulk gas consumption is also clearly trending up globally. Apart from 2020 (pandemic) and 2009 (GFC downturn) gas volumes globally have gone up every year for a very long time.

View attachment 129195

Also there's not yet a decline in physical oil consumption if we exclude pandemic-related factors of grounded aircraft etc.

If these companies aren't making money out of that then to me that raises some questions as to management decisions and so on. Ultimately a declining market will shrink the oil and gas business yes but it hasn't happened yet, the industry's very near its all time high (and would be at an actual high if not for the pandemic).

Bhp just following the narrative.. let's get green ,dump fossil fuel...but bhp is well known for magistral **** up in term of narrative based decisions
Went heavy shale oil,then off... billions in smoke...
Then offload S32 to concentrate in iron,oil and coal ...
All obvious winners in the move to EV.?..not...
And now out of oil..
Most probably another **** up.
BHP is the dodo IMHO. Will take years as starting so high..but better opportunities elsewhere.
The question is:
will wpl be able to profit from the new assets..no idea..
All the above based on economical point of views.
But that does not always mean good or bad for share prices.
Management incentives are based on sp, not company profits.,
The narrative is what matters as we can see with Tesla..
PE?..who cares...
So if social media machine works well, you could see wpl sp crashing with wpl printing money with ongoing strong gas oil demand..
and BHP sp going up the sky with collapsing earnings, as long as they get a female non white ceo, a purple hair transgender head of HR and do not blow aboriginal secret sites..or flood Amazon villages
Long gone are the day where numbers anf facts mattered ..my view only..i do not own either right now

 

[Garpal Gumnut]

So any reason why WPL unlikely to be a winner if you share the view of being bullish on Oil/Gas ?

I was using "unlikely" in it's broad adjectival rather than adverbial sense.

It will be a winner over the broad ASX. I haven't done a comparo within the oil sector to be honest. This news engages me so I will now.

Gold and Oil are my contrarian picks over the next 10 years.

gg

 

[qldfrog]

Gold and Oil are my contrarian picks over the next 10 years.

On that point we can agree..but what will be the effect of a Labour Green win on an Australian based oil producer?

 

[Miner]

Hello Folks
Thanks to all of you for such an intense, unbiased and informative thought sharing on a short span of time.
I learnt a lot with couple of take ways, almost convinced that BHP tried to get jail free cards by disposing some dud assets wrapped on silver foil to WPL, I was wrong in understanding the impact and withdraw my buy WPL until it starts rising from the fathom.
The excellent result from WPL is probably already factores on wpl price.
A big thanks to you folks.

 

[Austwide]

@Dona Ferentes Am I reading a few of these wrong? @Miner @Austwide . BHP and WPL aren't merging.

You are, I haven't posted in this thread, but did say rumour about A2M being taken over by Nestle.

 

[Miner]

@Dona Ferentes Am I reading a few of these wrong? @Miner @Austwide . BHP and WPL aren't merging.

You are, I haven't posted in this thread, but did say rumour about A2M being taken over by Nestle.

Yes mate
We are now clear as mud that WPL and BHP are not merging

 

[divs4ever]

only the BHP Petroleum arm and WPL

BUT depending on how you cut the figures , that is a BIG or little deal

little in that the Petroleum is about 5% of the total assets , but my trader buddy suggests it is 30% of the revenue , and given some project have only been acquired in the last year .. one might have expected a fair chunk of the planned Capex going into those fossil fuel projects

however BHP is down another 5% today , somewhere in the $45 range

mister market doesn't seem to like this move given the JV probably won't complete until next year , all very interesting

DYOR

 

[Garpal Gumnut]

On that point we can agree..but what will be the effect of a Labour Green win on an Australian based oil producer?

The Greens are a worry.

I was in Collinsville some days ago and that particular party's name is a no go expression there. They are still scarred by the unwashed invasion during the last federal election.

They seem to prosper elsewhere on the planet for some reason.

If the ALP do not preference the Greens last in every election henceforth, Queensland will keep them out of government Federally for a long, long time.

Even Scomo would get back in, unlikely as that may seem.

gg

 

[aus_trader]

Great, thought provoking discussion everyone, learnt a lot more about both companies.

So BHP's been selling off assets for a long time since I've followed it's progress. One of the biggest being those non-core commodities according to BHP to South32 Ltd (S32) via spin off.

Now selling the Oil/Gas assets to WPL.

So what's actually really worthwhile inside of BHP now ?

In my mind it was always the most diversified mining house on the asx and I hold a few shares. Is it becoming a non-diversified Iron Ore play with some Copper/Gold and U3O8 from Olympic Dam thrown in ?

After all this discussion, starting to worry about it's diversification and holding onto those shares. The falls of yesterday and today weighing in too ?

 

[qldfrog]

Great, thought provoking discussion everyone, learnt a lot more about both companies.

So BHP's been selling off assets for a long time since I've followed it's progress. One of the biggest being those non-core commodities according to BHP to South32 Ltd (S32) via spin off.

Now selling the Oil/Gas assets to WPL.

So what's actually really worthwhile inside of BHP now ?

In my mind it was always the most diversified mining house on the asx and I hold a few shares. Is it becoming a non-diversified Iron Ore play with some Copper/Gold and U3O8 from Olympic Dam thrown in ?

After all this discussion, starting to worry about it's diversification and holding onto those shares. The falls of yesterday and today weighing in too ?

do not forget coal, unless mistaken they still have a lot of it ;
so in a short answer: BHP=chinese iron smelters..the new economy?

 

[Craton]

Am I reading a few of these wrong? @Miner @Austwide . BHP and WPL aren't merging. BHP petroleum assets are going into wpl, and BHP shareholders are receiving WPL scrip so the new Woodside will be much bigger with new and old, a lot of overlapping, shareholders. Among the details not yet revealed is what proportion will BHP assets be in the new WPL .

My take is that its BHP Petroleum so oil and gas assets thus I'd say, does not include any coal assets.

From this FNA link:

By Eva Brocklehurst

As BHP Group ((BHP)) makes a concerted effort to lift its environmental credentials, the deal that many suspected would be forthcoming has been announced: the merger of BHP Petroleum with Woodside Petroleum ((WPL)). {my bold}

Citi had been forming the view that BHP and oil were not well suited, recently speculating that Woodside could take over the Australian petroleum assets. The broker believes, while fast paybacks are possible for brownfield oil expansions such as Mad Dog 2 and Atlantis 3, this is more difficult for greenfield developments such as Trion and T&T North.

The offloading of the petroleum assets will be undertaken via an all-scrip merger with Woodside Petroleum, with Woodside shareholders owning 52% and BHP shareholders receiving Woodside shares to the equivalent of 48% of the enlarged base.