Australian LNG player Woodside has entered into binding sale and purchase agreements to acquire half of BHP Billiton’s Scarborough area assets in the Carnarvon Basin, located offshore Western Australia.
The acquisition includes a 25% interest in WA-1-R, in which ExxonMobil is the operator, and a 50% interest in WA-62-R, which together contain the Scarborough gas field. Woodside will also acquire a 50% interest in WA-61-R and WA-63-R which contain the Jupiter and Thebe gas fields, Woodside said in a statement on Monday.
Woodside will operate WA-61-R, WA-62-R and WA-63-R.
The Australian LNG company will pay BHP Billiton 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 effective date of the transaction is 1 July 2016.
BHP Billiton and ExxonMobil have been looking to develop the Scarborough field via a floating LNG solution.
The Scarborough area assets include the Scarborough, Thebe and Jupiter fields, which are estimated to contain gross 8.7 trillion cubic feet of gas resources at the 2C confidence level.
Woodside’s net share of the resources is estimated to be 2.6 trillion cubic feet of gas.
Woodside CEO Peter Coleman said that adding Carnarvon Basin volumes to the Australian portfolio would complement Woodside’s growth strategy and leverage the company’s deep water and LNG capabilities.
“We look forward to working with ExxonMobil and BHP Billiton following completion of the transaction to progress commercialisation of these world-class resources,” he said.
BHP Billiton President Operations, Petroleum, Steve Pastor said: “BHP Billiton considers the proposed sale to Woodside to be a positive outcome for all parties. Woodside is a strong partner with substantial LNG experience in Western Australia, and we believe they will contribute positively to the future development of the Scarborough resources.”
Completion is subject to pre-emption rights and customary regulatory approvals and is targeted by the end of 2016.