PERTH (miningweekly.com) – The shareholders of ASX-listed oil and gas major Woodside have voted overwhelmingly in favour of the merger with mining major BHP’s petroleum assets.
More than 97% of the votes cast at the company’s annual general meeting on Thursday were done so in favour of the merger, which would give BHP investors a 48% stake in the merged entity.
Woodside and BHP in November last year struck an agreement to combine their respective oil and gas portfolios through a stock merger. BHP shareholders will be entitled to one Woodside share for every 5.5340 BHP shares they hold on the record date, and based on Woodside’s share price of $25.55 at April 6, the implied value of BHP Petroleum is $23.4-billion.
The proposed merger would create the largest energy company listed on the ASX, with a global top 10 position in the liquefied natural gas (LNG) industry by production, with the merged entity having delivered 200-million barrels of oil equivalent in the 2021 financial year.
The combined company will have a high margin oil portfolio, long life LNG assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition, the two companies said in a joint statement.
The merged company would have a diversified production mix of 46% LNG, 29% oil and condensate and 25% domestic gas and liquids, as well as a wide geographic reach with production from Western Australia, east coast Australia, US Gulf of Mexico, and Trinidad and Tobago with approximately 94% of production from OECD nations. Furthermore, the enlarged Woodside would have 2P reserves of over two-billion barrels of oil equivalent comprising 59% gas, and 41% liquids.
Woodside chairperson Richard Goyder told shareholders at the company’s meeting that the strategic and financial case for the proposed merger was compelling.
“It will bring together the best of both organisations to create a top 10 global independent energy company with the scale, diversity and resilience to provide value to shareholders and navigate the energy transition. We are also expecting to deliver significant synergies as we bring both businesses together,” he said.
MD and CEO Meg O’Neill noted that the merger was an opportunity for Woodside to increase its contribution to the world’s growing energy needs and build the scale, resilience and diversity to thrive through the energy transition.
“We are focused on ensuring the merged Woodside gets off to a strong start on our targeted completion date of June 1, setting the foundations for our long-term success,” she said.
While the merger agreement gained shareholder support, Woodside’s climate report, which was also on the table on Thursday, failed to garner similar sentiments.
The company’s Climate Report 2021, which was released in February, failed to gain support, with only 52% of shareholders casting a vote, and these votes being split evenly for and against the report.
Goyder told shareholders that Woodside stood behind its climate strategy and its two key elements; to reduce its net equity scope 1 and 2 greenhouse gas emissions, and invest in the products and services its customers needed, as they reduced their emissions.
“We believe the Climate Report 2021 is an accurate and transparent summary of Woodside’s approach to climate change, and we are focused on delivering the commitments we have made in this report.
“We acknowledge that the energy transition is a complex and ongoing process. Our shareholders’ views are important to us and will continue to inform our approach as it evolves,” he said.
O’Neill said that the company was proud of its contribution to meeting the world’s energy needs and confident of its ongoing role as a low-cost, lower-carbon energy provider.
“We have set targets to reduce our own net equity emissions and to invest $5-billion between now and 2030 in lower-carbon products and services that will support the decarbonisation journeys of our customers,” she said