Woodside forecasts increase in oil and gas production as Santos M&A talks continue
(Bloomberg) 鈥 Woodside Energy Group Ltd. has shown its ability to add value through acquisitions as it continues talks over a tie-up with Santos Ltd., according to the company鈥檚 top executive.
Australia鈥檚 largest energy producer reported production rose 19% to 187.2 MMboe last year, following completion of a deal to add BHP Group Ltd.鈥檚 oil and gas division.
鈥淲e鈥檝e now demonstrated that we do have that ability to bring two organizations together and to capture value,鈥 Woodside Chief Executive Officer Meg O鈥橬eill said in a phone interview. 鈥淲e鈥檙e looking at a range of ways to grow the business 鈥 Santos is one of them.鈥
Recent major oil and gas sector deals in the U.S. have involved low premiums and Woodside would only pursue a transaction with smaller rival Santos that 鈥渋s value-accretive for shareholders,鈥 the company said in a statement.
鈥淚t鈥檚 very early stage discussions and we鈥檙e going to be thorough in our due diligence and disciplined in our approach to any sort of commercial discussions,鈥 O鈥橬eill said in the interview.
Woodside鈥檚 shares declined 0.6% as of 12:33 p.m. in Sydney, as Australia鈥檚 benchmark index was steady.
鈥淲e are keen to grow the business in the areas where we have capability and expertise, which is focused on LNG and deep water,鈥 O鈥橬eill said. 鈥淭he fact that we now have a bigger global presence means we鈥檙e involved in a number of discussions on these sorts of opportunities.鈥
LNG demand is likely to remain stable this year, even with importer nations holding robust stockpiles and milder winter weather in Asia and Europe, she said.
鈥淭here is an expectation that China鈥檚 economy will continue to grow,鈥 according to O鈥橬eill. 鈥淲e鈥檝e seen buying resume from places like India and Bangladesh as they鈥檙e more able to participate in the market at the prices we鈥檙e at today.鈥
Perth-based Woodside forecasts production of 185 MMboe to 195 MMboe in 2024, of which about 45% of output will be LNG.
Capital expenditure rose to $5.7 billion in 2023 and is forecast at between $5 billion and $5.5 billion this year, the company said.
Lead image: Meg O'Neill, chief executive officer of Woodside (Photographer: Nicky Loh/Bloomberg)