Wed, Sep 09, 2015 - Page 15 News List

Woodside makes bid for Oil Search with eye on PNG

AFP, SYDNEY

Australian energy giant Woodside Petroleum Ltd yesterday made an estimated A$11.6 billion (US$8.1 billion) bid for Oil Search Ltd in a move to tap into the Papua New Guinea (PNG) market.

Oil Search said it was reviewing the bid that would see Woodside offer one share for every four Oil Search shares.

Oil Search was valued at about A$11.6 billion, a 14 percent premium to its closing share price of A$6.73 on Monday when Woodside closed at A$30.58.

The proposal is subject to satisfactory due diligence and regulatory approvals, as well as support from Oil Search’s major shareholder, the Papua New Guinea government.

Oil Search shares yesterday surged 17.38 percent to close at A$7.90, while Woodside shares slipped 3.01 percent to end at A$29.66.

The announcement buoyed energy stocks on the benchmark S&P/ASX 200 Index, with Santos closing 5.25 percent higher and AGL rising 3.68 percent.

Oil Search stressed that shareholders were “entitled to an offer which adequately reflects this value potential,” pointing to its share in the massive US$19 billion Papua New Guinea liquefied natural gas project — the largest development ever undertaken in the Pacific country.

The firm said that along with its other low-cost producing assets, it is well placed to capitalize from a recovery in the oil price, which has roughly halved in a year.

Woodside last month reported a 39 percent drop in net profit to US$679 million in the first half, saying the decline was due to falling commodity prices.

Oil Search said it recorded a net profit of US$227.5 million for the same period, a 49 percent increase from the previous year.

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