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Woodside Petroleum: Raising Billions To Fund The Development Of Another Large Gas Project


  • Woodside Petroleum has now purchased an additional 50% of the Scarborough gas asset from ExxonMobil.
  • This brings its ownership to 75%, and its share of the development expenses to $7.5B.
  • Two large projects will start contributing to the operating cash flow in 2018 and 2019, further expanding the free cash flow.
  • Woodside Petroleum definitely remains on track to produce 100 million barrels of oil-equivalent by 2020.


Almost three years ago, I had a close look at Woodside Petroleum (OTC:WOPEF) (WOPEY), as I believed in the company’s asset base. The oil and gas market was nearing its lows, and although Woodside had quite a bit of debt on its balance sheet, I believed the company’s pursuit of its gas strategy (and LNG) would be a solid move.

Source: asx.com.au

Fast forward to now. The oil and gas markets are stronger, Woodside is doing well (and still pays an attractive dividend), but even more interesting, it isn’t scared to double-dip on the gas and LNG opportunities in Australia. It has just purchased an additional 50% interest in the Scarborough from Exxon Mobil (XOM).

Although Woodside has a market capitalization of approximately A$30.4B (US$24.3B), it still has just one primary listing. That’s its ASX listing where the company is trading with WPL as its ticker symbol. The average daily volume is 2M shares for a total dollar volume of A$60M (US$45). Although Woodside is an Australian company trading in Australian Dollars, it does report its financial results in USD. All numbers are based on USD.

Woodside is buying an additional 50% of Scarborough – and plans to quickly develop the asset

Perhaps even more important than the company’s announcement of its full-year results was the announcement it was acquiring an additional 50% stake in the Scarborough gas field from Exxon Mobil (XOM). Woodside is paying US$444M for the 50% stake and will wire an additional $300M to Exxon Mobil upon a positive final investment decision.

An interesting price, considering Woodside purchased BHP Billiton’s (BHP) 25% stake for $250M + $150M. Despite a higher gas price and Woodside’s access to more capital, Exxon Mobil is receiving more than 10% less than BHP did (during worse market times, just 18 months ago). It’s a heavy bet from Woodside, but I

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This article was written by

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We zoom in on capital gains and dividend income in European small-caps
As I'm a long-term investor, I'll highlight some stockpicks which will have a 5-7 year investment horizon. As I strongly believe a portfolio should consist of a mixture of dividend-paying stocks and growth stocks, my articles will reflect my thoughts on this mixture.

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