Bulletin: Woodside's Proposed Merger With BHP Petroleum Improves Funding Flexibility

MELBOURNE (S&P Global Ratings) Aug. 19, 2021--Australia-based Woodside Petroleum Ltd.'s (BBB+/Negative/--) proposed all-scrip merger with BHP Group Ltd.'s (A/Stable/A-1) Petroleum division should help Woodside internally fund its sizable growth pipeline and ease pressure on the 'BBB+' rating, S&P Global Ratings said today. We expect BHP Petroleum's solid free cash flow generation to help Woodside fund upcoming growth opportunities. In addition, we believe the large increase in scale and diversity is likely to better position the predominantly integrated oil and gas company to weather more volatile markets and tackle the challenges of the energy transition. The combined portfolio will enjoy low unit production costs of about US$8 per barrel of oil equivalent, and benefit from up to $400 million of potential

...August 18, 2021 MELBOURNE (S&P Global Ratings) Aug. 19, 2021--Australia-based Woodside Petroleum Ltd.'s (###+/Negative/--) proposed all-scrip merger with BHP Group Ltd.'s (A/Stable/A-1) Petroleum division should help Woodside internally fund its sizable growth pipeline and ease pressure on the '###+' rating, S&P Global Ratings said today. We expect BHP Petroleum's solid free cash flow generation to help Woodside fund upcoming growth opportunities. In addition, we believe the large increase in scale and diversity is likely to better position the predominantly integrated oil and gas company to weather more volatile markets and tackle the challenges of the energy transition. The combined portfolio will enjoy low unit production costs of about US$8 per barrel of oil equivalent, and benefit from up to $400 million of potential cost synergies. The merger will increase Woodside's exposure to oil liquids. We view oil exposures to be more volatile than liquified natural gas (LNG) and domestic gas,...

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