SYDNEY (AFP) – Shares in Woodside Petroleum jumped on Wednesday following the Australian energy producer’s decision to pay US$2.75 billion to acquire stakes in liquefied natural gas projects from US firm Apache.
The deal came as Woodside delayed a decision Tuesday to invest in the Browse gas-export project off Western Australia to take advantage of lower costs for the multi-billion-dollar venture.
The oil and gas giant closed 3.02 per cent higher to Aus$35.50 (US$28.93) on Wednesday. It fell 2.6 per cent to Aus$34.46 on Tuesday along with declines in other energy stocks.
The acquisition transaction includes a 13 per cent interest in Wheatstone LNG and a 65 per cent interest in the Julimar-Brunello upstream gas development, both in Western Australia.
Woodside also acquires a 65 per cent interest in the Balnaves oil project off the coast of Western Australia, as well as a 50 per cent interest in the Kitimat LNG venture in Canada.
The energy market has been challenged by tumbling oil prices, which plunged further following a decision by the Organisation of the Petroleum Exporting Countries last month against cutting production.
US benchmark West Texas Intermediate for January delivery has dropped about 50 per cent since June as crude supplies have increased while demand growth has slowed.
The oil slump has also raised question marks over LNG projects. But Woodside’s chief executive Peter Coleman said it presented an opportunity for investment in high-quality projects, adding that the transaction was a “natural fit” with his company’s portfolio.
“We are now in a position to take advantage of challenging market conditions and use cash reserves and existing debt facilities to acquire very high quality assets,” he said in a statement.