Bulletin: Woodside Energy's BHP Petroleum Merger Enhances Funding Flexibility

This report does not constitute a rating action. MELBOURNE (S&P Global Ratings) June 1, 2022--The completion of Australia-based Woodside Energy Group Ltd.'s all-scrip merger with BHP Petroleum improves the funding flexibility of the combined group. We expect the merger, which was finalized today, will deliver a material boost to cash flow from a doubling in production capacity to around 193 million barrels of oil equivalent a year. The improved funding flexibility of the group should accommodate at the current rating level (BBB+/Negative/--) the inherent capital expenditure (capex) risks associated with its sizable growth pipeline. The company is exposed to funding large capex of about US$12 billion (100% basis; Woodside share: estimated US$8.4 billion post-merger) from the recently sanctioned Scarborough and

...MELBOURNE (S&P Global Ratings) June 1, 2022--The completion of Australia-based Woodside Energy Group Ltd.'s all-scrip merger with BHP Petroleum improves the funding flexibility of the combined group. We expect the merger, which was finalized today, will deliver a material boost to cash flow from a doubling in production capacity to around 193 million barrels of oil equivalent a year. The improved funding flexibility of the group should accommodate at the current rating level (###+/Negative/--) the inherent capital expenditure (capex) risks associated with its sizable growth pipeline. The company is exposed to funding large capex of about US$12 billion (100% basis; Woodside share: estimated US$8.4 billion post-merger) from the recently sanctioned Scarborough and Pluto Train 2 expansion. The company is pursuing strategies to mitigate the funding and execution risks, such as the 49% equity interest sell-down of Pluto Train 2. Nevertheless, the scale of the Scarborough project on a stand-alone...

Bulletin