Woodside Petroleum informed Papua New Guinea-focused Oil Search that it has withdrawn its proposal to merge the businesses.
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Woodside CEO Peter Coleman. Image from Woodside. |
This follows the Australian explorer’s US$8.1 billion all stock proposal in September to merge with Oil Search through a scheme of arrangements.
The board of Oil Search rejected the offer citing it to be highly opportunistic and grossly undervaluing the company.
Woodside said it isn’t pursuing any alternative transactions to combine the businesses.
According to Oil Search, the group has a material equity position in the PNG LNG project and an extensive exploration portfolio, which provides substantial scope for capital growth and the potential for production to double from current levels by 2020.
In Q3 2015, Oil Search produced 7.42 MMboe, which represented the highest quarterly production in the company’s history. The PNG LNG project contributed 5.56 MMboe, while production from the base PNG oil and gas business was 1.86 MMboe.
Total production for the nine months to September 2015 was 21.74 MMboe and total revenue for the quarter was $379.0 million, compared to $391.5 million in Q2 2015. At the end of September 2015, Oil Search had cash of $866.9 million and debt of $4.28 billion. Including $750 million of undrawn corporate credit facilities, the company had total liquidity of $1.6 billion.
Woodside’s sales revenue slid by 44.6% in Q3 to $1.09 million, from $1.96 million a year ago. Production, however, increased by 0.4% to 25.3 MMboe, from 25.2 MMboe in Q3 2014.
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