Woodside buys into BHP’s Scarborough gas assets

Australian energy giant Woodside will acquire half of BHP Billiton’s Scarborough gas assets in the Carnarvon Basin, offshore Western Australia.

Woodside will pay US$250 million on completion of the transaction and a contingent payment of $150 million upon a positive final investment decision to develop the Scarborough field.

The Scarborough area assets include the Scarborough, Thebe and Jupiter fields, which are estimated to contain gross 8.7 Tcf of gas resources. Woodside’s net share of the resources is estimated to be 2.6 Tcf of gas.

The acquisition includes 25% interest in WA-1-R and 50% interest in WA-62-R, which together contain the Scarborough gas field. ExxonMobil is the operator of WA-1-R.

Furthermore, Woodside will also acquire 50% interest and operate WA-61-R and WA-63-R which contain the Jupiter and Thebe gas fields.

CEO Peter Coleman said that adding Carnarvon Basin volumes to the Australian portfolio would complement Woodside’s growth strategy and leverage their company’s deepwater and liquefied natural gas capabilities.

“We look forward to working with ExxonMobil and BHP Billiton following completion of the transaction to progress commercialization of these world-class resources,” he said. “Completion is subject to pre-emption rights and customary regulatory approvals and is targeted by year end 2016.”

In July 2016, Woodside announced the agreement to buy all of ConocoPhillips’ offshore oil exploration interests in Senegal for $350 million, with the option for Woodside to operate the future development of any resources.

This acquisition will see the firm acquire 100% of the shares in ConocoPhillips Senegal B.V. which holds a 35% working interest in a production-sharing contract (PSC) with the Government of Senegal covering three offshore exploration blocks, such as Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore.

The PSC includes the SNE and FAN deepwater oil discoveries, with SNE alone estimated to contain 560 MMbbl of recoverable oil.

Woodside is also preparing to begin its offshore Myanmar drilling campaign in 2017. The firm has increased its best estimate contingent resource by 83 MMboe to 4481 MMboe in Myanmar, following the announcement of two gas discoveries in Q1 2016.

The group recorded production of 45.9 MMboe in 1H 2016, 9% higher than 1H 2015, and 50% lower net profit of $340 million due to the drop in commodity prices.