woodside energy (ASX:WDS) announced an asset exchange with Chevron. The deal will see Woodside strengthen its position in Western Australia’s North West Shelf (NWS) projects, while selling its interests in the Wheatstone and Julimar-Brunello projects.

The transaction also includes a cash payment of up to $400 million from Chevron.

detail

Woodside will acquire a 16.67% stake in Chevron’s NWS Project, a 16.67% stake in the NWS Oil Project, and a 20% stake in the Angel Carbon Capture and Storage (CCS) Project.

In return, Woodside will transfer a 13% interest in the Wheatstone project and a 65% interest in the Julimar Brunello project to Chevron.

Woodside will receive an initial $100 million upfront payment from Chevron upon closing of the transaction. Upon completion, Woodside will receive an additional $300 million in cash payments in addition to a contingent payment of up to $100 million based on the performance of the Julimar Phase 3 project.

The transaction is expected to close in 2026, subject to regulatory approvals and completion of certain operational milestones, including handover of the Julimar Phase 3 project.

Impact on Woodside’s portfolio

  • NWS Project: Woodside’s stake in the NWS liquefied natural gas (LNG) project will increase from 33.33% to 50%.
  • NWS Oil Project: Woodside’s stake will increase from 50% to 66.67%.
  • Wheatstone: Woodside will fully exit its 13% non-operating interest in the Wheatstone project, which processes gas from offshore fields including Julimar and Brunello.
  • Julimar Brunello: Woodside will transfer a 65% interest in the Julimar Brunello gas field, but will retain operational control until the completion of the Julimar Phase 3 project, which is expected to be delivered in 2026.
  • Angel CCS Project: Woodside’s stake will double from 20% to 40%, strengthening its position in the carbon capture and storage space.

These changes result in a net increase of 9.6 million barrels of oil equivalent (MMboe) to Woodside’s proven and probable reserves (2P).

strategic rationale

Meg O’Neill, Chief Executive Officer of Woodside, commented: “The strategic and commercial rationale for this asset exchange is attractive to Woodside. It simplifies our portfolio and strengthens our position in the LNG assets we operate, increasing our focus and efficiency. Instantly increases cash flow and includes cash disbursements at both execution and completion.”

Woodside stock closed 1.91% lower at $23.10 yesterday.