ASX-listed Woodside Energy Group (AU:WDS) has agreed to an asset swap deal with U.S.-based energy company Chevron (CVX) to streamline their oil and gas assets in Western Australia. This deal enables both companies to focus on their major LNG operations, capitalizing on the growing demand for natural gas as countries shift from coal to cleaner energy sources to lower carbon emissions. Following the announcement, WDS stock fell by 1.31% in today’s session.
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Woodside Energy is an oil and gas company with projects in Australia, Mexico, and Trinidad and Tobago.
Woodside Reveals Asset Swap Details
As part of this deal, Woodside will take over Chevron’s 16.67% interest in the North West Shelf (NWS) Project and the NWS Oil Project. Moreover, Woodside will acquire a 20% stake in the Angel Carbon Capture and Storage (CCS) Project. In return, Chevron will grab a 13% non-operated interest in the Wheatstone Project and a 65% operated interest in the Julimar-Brunello Project, effectively marking Woodside’s exit from these ventures.
In terms of monetary aspects, Chevron will make a cash payment of up to $400 million to Woodside, including $300 million upon completion. It also includes a contingent payment of up to $100 million tied to the transfer of the Julimar Phase 3 Project and its future production outcomes.
Additionally, the deal is expected to bring in about $400 million in cash flow by utilizing tax deductions available after the completion.
The transaction will become effective on January 1, 2024.
Is WDS Stock a Good Buy?
WDS stock received a Moderate Buy rating on TipRanks, backed by six Buy, five Hold, and one Sell recommendations. The Woodside share price forecast is AU$32.34, implying a change of 40% from the current price level.
