Woodside Says Santos Merger Talks Still at Early Stage

Tuesday, January 23, 2024

Woodside Energy CEO Meg O'Neill said on Wednesday there was no recent precedent for sizable premiums in oil and gas deals as the producer reported it was still in the early stages of talks over a potential $52 billion merger with Santos.

The company on Wednesday forecast a jump in 2024 production and reported a 3% sequential rise in fourth-quarter revenue on higher realised prices.

Asked about reports that Santos shareholders want any merger to come with a sizable premium, O'Neill said recent deals in the sector had tended in the opposite direction.

"I would note there have been a number of mergers announced within the last three or four months in the oil and gas sector, in both Europe and the US, and the precedents for our sector is really low to nil premium," O'Neill said in an interview.

The comments reveal a potential gulf between the expectations of Santos shareholders eager for a meaty premium after years of disappointing share performance and a Woodside concerned about overpaying for its smaller rival.

Woodside and Santos in December confirmed they were in preliminary talks to create a major oil and gas company, which together would have assets in Australia, Alaska, the Gulf of Mexico, Papua New Guinea, Senegal and Trinidad and Tobago.

O'Neill said talks were still at an early stage and there was no certainty a deal would progress. Woodside would be disciplined and only pursue a transaction that was "value-accretive for shareholders," she added.

The country's top independent gas producer reported on Wednesday a record 2023 production of 187.2 million barrels of oil equivalent (mmboe) and flagged the potential for further growth in this year's guidance of 185 million to 195 mmboe.

Revenue rose 3% to $3.36 billion for the December quarter thanks to a jump in realised prices, compared with $3.26 billion in the previous quarter. It missed a Visible Alpha consensus estimate of $3.59 billion, according to RBC.

While milder winters in Asia and Europe had led to slightly softer liquefied natural gas (LNG) pricing compared to previous years, O'Neill said she remained "bullish" about the fuel's long term prospect.

(Reuters - Reporting by Himanshi Akhand and Ayushman Ojha in Bengaluru, Lewis Jackson in Sydney; Editing by Sriraj Kalluvila)

Categories: Offshore Activity Oil and Gas

Related Stories

Bristow Lands $200M Helicopter Services Deal with Equinor and Vår Energi

McDermott Lines Up Qatar’s Decom Job Covering 27 Offshore Platforms

Chevron Expects Up to 225,000 boepd First Quarter Output Cut

Current News

US Judge to Consider Orsted Request to Block Trump Offshore Wind Halt

Dajin, Zima Plan Offshore Wind Foundations Plant at Spain's Gijon Port

First Turbine Stands Tall at Dominion Energy’s 2.6GW US Offshore Wind Farm

SeaBird Exploration Signs Contract Extension for Seismic Research Vessel

Subscribe for OE Digital E‑News