Woodside Petroleum to acquire BHP gas field assets for US$400 mn

Woodside Petroleum Ltd. entered into a binding agreement to buy half of BHP Billiton’s Scarborough area assets in the Carnarvon Basin, located offshore Western Australia for US$400 million as part of its move to boost its reserves.

The acquisition will give Woodside a 50% interest in the WA-62-R permit and a 25% interest in the WA-1-R, which is operated by ExxonMobil Corp. The WA-62-R and WA-1-Rtogether contain the Scarborough gas field.

The company will also acquire a 50% interest in WA-61-R and WA-63-R which contain the Jupiter and Thebe gas fields. Woodside will operate WA-61-R, WA-62-R and WA-63-R.

Woodside will be paying US$250 million to BHP once the deal is completed by the end of the year. A potential contingent payment of US$150 million will also be made upon a positive final investment decision to develop the Scarborough field.

The Scarborough area assets include the Scarborough, Thebe and Jupiter fields, which are estimated to contain gross 8.7 trillion cuft of gas resources at the 2C confidence level.

Woodside’s net share of the resources is estimated to be 2.6 trillion cuft of gas. Woodside CEO Peter Coleman said that adding Carnarvon Basin volumes to the Australian portfolio would complement Woodside’s growth strategy and leverage the company’s deep water and LNG capabilities.

BHP will maintain a 50% stake in the North Scarborough, Jupiter and Thebe fields and a 25% holding in the Scarborough field.

The deal is still subject to approval from Scarborough’s other participants including Exxon.