Shell to sell stake in Woodside Petroleum for $2.7B


(Rigzone) Royal Dutch Shell plc has revealed that it will sell its entire stake in Woodside Petroleum Limited for $2.7 billion.

Early on Monday, the company said its subsidiary, Shell Energy Holdings Australia Limited (SEHAL), had entered into an underwriting agreement with two investment banks for the sale of 71.6 million shares in Woodside, representing 64 percent of its interest in the company and 8.5 percent of the issued capital.

A short time after Shell’s initial announcement however, the company revealed that SEHAL had upsized its agreement, ‘following strong demand from institutional investors’. Now, a total of 111.8 million shares have been agreed to be sold, representing 13.28 percent of the issued share capital of Woodside and the entirety of SEHAL’s total shareholding.

The sale is expected to complete on November 14, with settlement expected on November 16.

“Today’s announcement contributes to our strategy to reshape Shell, to deliver a world class investment case and to strengthen our financial framework. Proceeds will contribute to reducing our net-debt. This is another step towards the completion of our three-year $30 billion divestment program,” a Shell spokesperson told Rigzone.

“We maintain a significant presence in Australia through interests in a number of LNG projects, both operated and non-operated,” the spokesperson added.

In November 2010 Shell sold 10 percent of the issued capital of Woodside, retaining a 24.27 percent interest. This interest was further diluted to 23.08 percent because of Shell’s decision not to participate in Woodside’s dividend re-investment program.

In June 2014, Shell sold approximately 78.27 million shares in Woodside representing 9.5 percent of Woodside’s issued share capital, retaining an interest of 13.58 percent. This interest was further diluted to 13.28 percent due to Shell not participating in Woodside’s dividend re-investment program.

Outside of its interest in Woodside, Shell has the following interests in Australia:

  • QGC venture (Shell operated, majority interest)
  • Arrow Energy (Shell 50 percent interest)
  • Gorgon LNG (Shell 25 percent interest)
  • North West Shelf (Shell 16.67 percent interest)
  • Prelude FLNG project (Shell operated 67.5 percent interest)
  • Browse Development venture (Shell 27 percent interest)
  • Sunrise LNG joint venture (Shell 26.6 percent interest)
  • Shell Energy Australia (Shell 100 percent interest)