WDS - Woodside Energy Group

[Craton]

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 ?

Isn't BHP holding and amassing Potash and Kimberlite pipes?

I'm sure that BHP has the $$$ and access to funding so that they'd be able to t/over, merge, develop and fast track "new tech" and more eco-friendly resources/projects. Hell, they may even get into hydro, hydrogen or fusion energy.

 

[divs4ever]

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 ?

well since the 'new BHP' seems willing to buckle to activist pressure , one must consider if BHP will self-mutilate to a much smaller and less profitable company , say searching the world for REE , or lithium or wind-farms , or something else where profits won't scale up ( another arm with tiny margins )

ALSO concerning must be the recent energy acquisitions where they have decided to make a complete U-turn ,
bad research or bad management BHP should have enough high-level skills to know how to evaluate , shale oil , deep sea oil drilling , etc etc or be smart enough to step back from signing the contracts , until they DO .

i would be more worried about BHP becoming a one-trick pony with two amputated legs ( not very good at anything they do )

 

[divs4ever]

Isn't BHP holding and amassing Potash and Kimberlite pipes?

I'm sure that BHP has the $$$ and access to funding so that they'd be able to t/over, merge, develop and fast track "new tech" and more eco-friendly resources/projects. Hell, they may even get into hydro, hydrogen or fusion energy.

there is a BIG difference between buying 'world class assets ' and making money ... remember Eaglehawk

and having more money than you can invest wisely is NOT always a good thing( ask the former Rinker share-holders )

 

[Craton]

I'll not argue that the big Australian hasn't stuffed up along the way. Maybe BHP is still stuffing up by kowtowing to the lobbying shareholders. I'd be having a transition plan not just dump and run.

 

[Value Collector]

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

Eventually, but not for a long time, and given that Oil Well investments have a limited life anyway, if they writing really was on the wall that Oil demand was going to be dropping every year into the future, Oil companies could simply stop investing in new wells, and let their portfolio of assets return to cash and either pay this back to shareholders, or invest in some other energy infrastructure.

Demand isn't going to crash over night, they can make a decision on each new project as it comes about based on where they see demand.

 

[Value Collector]

I'll not argue that the big Australian hasn't stuffed up along the way. Maybe BHP is still stuffing up by kowtowing to the lobbying shareholders. I'd be having a transition plan not just dump and run.

I guess the transition plan is Woodside, eg. hand they assets over to them, give BHP some WPL shares and allow WPL to make the decision about when/how/if to continue making investments in new Wells.

As I described above, each new investment in oil wells is an annuity type investment, it kinda makes sense to aggregate these types of assets into a larger combined businesses, I expect to see alot of consolidation in oil as the sun sets on the business, but its not sun set just yet, probably mid afternoon though.

 

[aus_trader]

I'll not argue that the big Australian hasn't stuffed up along the way. Maybe BHP is still stuffing up by kowtowing to the lobbying shareholders. I'd be having a transition plan not just dump and run.

That's what I am thinking along the lines of... By the way thanks for all the others contributing to the discussion as well. I like taking action based on the information that's available right now, even if it's not the right move in hindsight. So my plan of action is:

Sell some tomorrow (hopefully not a freaky Friday with another 6% wipe off like the last two trading days! ), then re-assess about the remainder when the BHP_Petro./WPL deal is done. Maybe will keep some as a long term holding in case my original investment thesis is correct and BHP is still the diversified? mining powerhouse that I thought it would always be...

As far as Oil/Gas is concerned I am in the camp that the sun has not set for these commodities, same as some of the other members who have also said it with much more analysis especially from @Smurf1976 . By the way, I am not reluctant to take on new technologies and climate change related green projects. In fact I have already thought about and researched up on those topics and there is a hydrogen play and a Li battery recycling play already in the Speculative Stock Portfolio and Li batteries haven't even become a global environmental waste problem yet while that little spec company is filing away Patents left, right and center to develop and protect/copyright/trademark the technology to recycle them and save the world of the future headache. But I am also a realist and I just can't fathom the idea of cutting off the Petroleum demand to an insignificant level for decades. In fact the current subdued demand could come back with a vengeance once the world is immunised and as someone said, all those grounded airlines and anchored cargo carriers and cruise ships can't keep up with all the pent up demand. So those hated Oilers including WPL may be worth keeping an eye on...

 

[aus_trader]

After posting I did further analysis into the wee hours of the morning as to what other information is available that we haven't looked at so far with respect to the two companies undergoing the transaction.

Looking at every angle, I decided to postpone the BHP partial sell-down by two weeks till September 2nd. Reason is mom & pop investors like us have a chance to recover some of the money lost over the last couple of days of heavy falls. I just realised BHP is paying out it's biggest ever dividend payment since it's inception, a whopping $2.736 100% franked. That's a yield or return of 6.16% based on current price of $44.40 approx.

Normally would be happy to hang out for a year or more to receive a yield of anything close to 5% in the current low yield / low interest environment, but when it's in two weeks, I'll be reluctant to sell right now. I don't have any idea what the share price will do in the next two weeks, but there is likely to be a little buying coming in leading up to the dividend date when investors start seeing this...

 

[divs4ever]

well overnight i lowered my FMG order to $19.90 and hooked a winner , lowered the WPL order to $19 and avoided a buy this morning ( a solid chance it would have got hit @ $19.35 )

was not planning to sell my BHP but AM watching carefully to see if there is a reason to change my mind , i PROBABLY won't buy before the ex-div. date BUT the price MIGHT continue sliding enough to tempt me to a small extra parcel say the sub $40 area

am still wary after it buckled to Elliot in TWO areas , that along might attract other sharks

 

[Value Collector]

That's what I am thinking along the lines of... By the way thanks for all the others contributing to the discussion as well. I like taking action based on the information that's available right now, even if it's not the right move in hindsight. So my plan of action is:

Sell some tomorrow (hopefully not a freaky Friday with another 6% wipe off like the last two trading days! ), then re-assess about the remainder when the BHP_Petro./WPL deal is done. Maybe will keep some as a long term holding in case my original investment thesis is correct and BHP is still the diversified? mining powerhouse that I thought it would always be...

As far as Oil/Gas is concerned I am in the camp that the sun has not set for these commodities, same as some of the other members who have also said it with much more analysis especially from @Smurf1976 . By the way, I am not reluctant to take on new technologies and climate change related green projects. In fact I have already thought about and researched up on those topics and there is a hydrogen play and a Li battery recycling play already in the Speculative Stock Portfolio and Li batteries haven't even become a global environmental waste problem yet while that little spec company is filing away Patents left, right and center to develop and protect/copyright/trademark the technology to recycle them and save the world of the future headache. But I am also a realist and I just can't fathom the idea of cutting off the Petroleum demand to an insignificant level for decades. In fact the current subdued demand could come back with a vengeance once the world is immunised and as someone said, all those grounded airlines and anchored cargo carriers and cruise ships can't keep up with all the pent up demand. So those hated Oilers including WPL may be worth keeping an eye on...

In regards to BHP not being the diversified miner you wanted it to be anymore, another way to look at it is that if you retain the WPL shares in your portfolio, they even though BHP is less diversified, your portfolio over all has not really changed.

Eg. If you were happy to have BHP hold these Oil fields before, you should be equally happy to retain the WPL shares.

I plan just to put the WPL shares in the bottom draw and collect the divvies, and just watch how the oil business plays out over the next 20 years, it’s a slow moving story, and the energy business is a good place to be once planes start flying again.

 

[divs4ever]

now for a trader/investor buddy ( with a margin loan facility ) BHP offers a completely different opportunity

 

[divs4ever]

In regards to BHP not being the diversified miner you wanted it to be anymore, another way to look at it is that if you retain the WPL shares in your portfolio, they even though BHP is less diversified, your portfolio over all has not really changed.

Eg. If you were happy to have BHP hold these Oil fields before, you should be equally happy to retain the WPL shares.

I plan just to put the WPL shares in the bottom draw and collect the divvies, and just watch how the oil business plays out over the next 20 years, it’s a slow moving story, and the energy business is a good place to be once planes start flying again.

that would assume WPL lifts it's game and not just it's asset base , history shows plenty of companies that cannot exploit new acquisitions properly

MLX and the 'copper adventure' for example or maybe we could point at AMP when it grabbed that big transformational acquisition , or maybe even WES and the UK hardware adventure

getting them and making a PROFIT can be two different thing

now a more interesting dilemma might be do you buy BHP soon to earn more WPL ( later ) or wait to see which instos sell down the 'gifted' WPL sometime next year

 

[Value Collector]

that would assume WPL lifts it's game and not just it's asset base , history shows plenty of companies that cannot exploit new acquisitions properly

now a more interesting dilemma might be do you buy BHP soon to earn more WPL ( later ) or wait to see which instos sell down the 'gifted' WPL sometime next year

I am not a WPL expert, but will certainly be doing a bit of reading on it.

Correct me if I am wrong, but from what I can see is that over the years they have relied on their cash cow (North west shelf assets) which has performed well, but have never really been able to find another big play outside that region.

but being given the BHP assets will give them a big hand to play, I imagine they will be inheriting BHP’s Houston office, full of good people too.

 

[divs4ever]

but BHP's Bass Strait asset should be waning or at least need more exploration to create replacement reserves

oil/gas isn't like a depleted gold mine where you can re-process the tailings dams , and and waste heaps ( the previously uneconomical over-burdens ) and maybe earn some extra exploration capital ,

but let's hope WPL at least cherry-picks the new staff ( i assume there will be SOME redundancies in all this )

 

[aus_trader]

In terms of cost reductions, WPL has already started on that path in terms of use of automation and robotics...

 

[Craton]

^^
As per above re. automation. From Woodside's website

ITNews link reporting WPL has been heavily into robotics for sometime now.

 

[aus_trader]

^^
As per above re. automation. From Woodside's website

ITNews link reporting WPL has been heavily into robotics for sometime now.

Great to see our engineers working with NASA and bringing some of that experience and expertise back home

 

[sptrawler]

Woodside's hydrogen plant, starting to gain some unwanted attention.

Mark McGowan should be red-faced after greenwashing Woodside’s hydrogen plan

To see through the smoke you need to know a little bit about hydrogen, and government and company spin doctors hope you do not, so please read on.

www.watoday.com.au

 

[Belli]

I've never owned WPL, but I'm interested now it is looking to expand into H2, mainly because I think the push to H2 is going to far outstrip the ability to produce it cleanly especially in the initial stages.

The comment intrigued me. As I don't use any sort of software to track my share holdings, I asked a mater of mine if he could compare WPL to a plain old vanilla ETF VAS over 10 years.

He sent me these screen shots (I was told he is using sharesight.)

On which one would you prefer to place a bet?

 

[sptrawler]

The comment intrigued me. As I don't use any sort of software to track my share holdings, I asked a mater of mine if he could compare WPL to a plain old vanilla ETF VAS over 10 years.

He sent me these screen shots (I was told he is using sharesight.)

View attachment 134251

View attachment 134252

On which one would you prefer to place a bet?

Fair point and I am looking at adding VAS, into the core holding of ETF's and LIC's, I don't see any hurry to add VAS atm..
This is more a buy to sell one, as I don't see the next 10 years being reflective of the last 10 and is also why I earlier mentioned AGL which I've also never owned before.
Everyone to their own. ?