Australia's biggest oil and gas producer, Woodside said it signed a deal to buy ExxonMobil's share of the Scarborough gas field located in the Carnarvon Basin, offshore Western Australia.
Woodside will pay A$400 million for the stake and the deal includes a contingent payment of $300 million once the final investment decision has been made, it said in a statement.
The company will acquire an additional 50 percent interest in WA-1-R which contains the majority of the Scarborough gas field. Upon completion of the transaction Woodside will have a 75 percent interest in WA-1-R and a 50 percent interest in WA-61-R, WA-62-R and WA-63-R.
Separately, Woodside said it would raise A$2.5 billion ($1.96 billion) from shareholders to fund the purchase of ExxonMobil Corp’s stake in the Scarborough gas field and fund developments in Australia and Senegal.
Peter Coleman, CEO of Woodside said the Scarborough acquisition delivered greater alignment, control and certainty for the project while also unlocking shareholder value
In November 2016, Woodside completed the acquisition of half of BHP Billiton's Scarborough area assets which include the Scarborough, Thebe and Jupiter gas fields, which are estimated to contain contingent resources (2C) of 2.6 Tcf of dry gas (8.7 Tcf, 100 percent).
Woodside estimates its LNG flow will be boosted by 40 percent when Scarborough production starts in 2025.
Coleman said: “Our Burrup Hub concept is advanced by our announcement today of an increased stake in the Scarborough gas field. The development concept involves maximizing existing infrastructure at the Pluto LNG plant to meet a market gap we expect will emerge from the early 2020s.”
With the announcement of the stake purchase, Woodside also announced a full-year net profit of A$$1 billion. Its 2017 production was 84.4 MMboe and sales revenue was $3.62 billion.
“Our net profit after tax has increased by 18 per cent year-on-year, driven by higher prices for our products and sustained low production costs,” Coleman said. “At the same time, we were able to maintain our outstanding safety performance and our three FPSO facilities achieved a record average reliability of 95 per cent.”