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(Alliance News) - BHP Group and Woodside Petroleum have agreed to merge their oil and gas portfolios to create one of the 10 largest independent energy producers in the world and the largest listed in Sydney, the pair said on Tuesday.
BHP and Woodside had confirmed talks about such a combination on Monday. They said on Tuesday that, following the all-stock merger of the two oil and gas businesses, Woodside shareholders will have 52% of the new company and BHP shareholders 48%.
The two companies said they expect to achieve more than USD400 million per year in cost synergies from the combination.
"The merger of our petroleum assets with Woodside will create an organisation with the scale, capability and expertise to meet global demand for key oil and gas resources the world will need over the energy transition," said BHP Chief Executive Officer Mike Henry.
Referring to shareholder agitation for BHP to shed its oil exposure and become a pure miner, Henry said: "Bringing the BHP and Woodside assets together will provide choice for BHP shareholders, unlock synergies in how these assets are managed and allow capital to be deployed to the highest quality opportunities."
The combined business will produce 200 million barrels of oil equivalent per year, based on financial 2021 net production, from locations ranging from Australia to the Gulf of Mexico and Trinidad and Tobago. Of this 46% will be liquefied natural gas, 29% oil and condensate, and 25% domestic gas and liquids.
The announcement came as BHP reported its results for the financial year that ended June 30, saying pretax profit jumped to USD24.60 billion from USD15.05 billion a year before, as revenue rose to USD60.82 billion from USD42.93 billion. It declared an annual dividend of 301.0 US cents, up from 120.0 cents the year before.
BHP shares were up 9.2% early Tuesday in London, while Woodside shares closed down 2.1% in Sydney.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 7,133.59
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Hang Seng: down 1.9% at 25,686.84
Nikkei 225: closed down 0.4% at 27,424.47
DJIA: closed up 110.02 points, or 0.3%, at 35,625.40
S&P 500: closed up 11.71 points, or 0.3%, at 4,479.71
Nasdaq Composite: closed down 29.13 points, or 0.2%, at 14,793.76
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EUR: down at USD1.1767 (USD1.1785)
GBP: down at USD1.3805 (USD1.3850)
USD: up at JPY109.26 (JPY109.15)
Gold: up at USD1,791.70 per ounce (USD1,786.04)
Oil (Brent): soft at USD69.02 a barrel (USD69.15)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
1100 CEST EU gross domestic product
1100 CEST EU unemployment
0830 EDT US retail sales
0915 EDT US industrial production
1000 EDT US manufacturing & trade: inventories & sales
1000 EDT US NAHB housing market index
1630 EDT US API weekly statistical bulletin
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The UK unemployment rate came in slightly lower than expectations in the second quarter of 2021, early data from the Office for National Statistics showed. The unemployment rate for the three months to June was estimated to be 4.7%, down a touch from 4.8% for the three months to May. This improved upon market expectations, according to FXStreet, which saw the unemployment rate remaining unchanged. The UK jobless rate started 2021 at 5.0%, representing the three months to January. Also, early estimates for July indicate that the number of payrolled employees rose by 2.0% compared with the same month the year before, which is a rise of 576,000 employees. However, the UK statistics office noted the number of payrolled employees remains down by 0.7% since February 2020, a fall of 201,000.
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BROKER RATING CHANGES
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DEUTSCHE BANK RAISES FUTURE PLC PRICE TARGET TO 4,138 (3,802) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Telecommunications provider BT has named current Whitbread, ASOS and Kantar Group chair Adam Crozier as its new chair, replacing outgoing Jan du Plessis. Crozier will take up the role on December 1, after becoming chair designate at the start of November. On taking up the role with BT, Crozier will step down as chair of online fashion retailer ASOS at the end of November, and will also step down as a non-executive director of Sony at the end of 2021.
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Just Eat Takeaway reported 61% growth in orders in the first half, leading to a surge in interim revenue, though the costs of competing with delivery specialists such as Deliveroo and Uber Eats hurt profit. "In the first six months of this year, Just Eat Takeaway.com continued to invest significantly, predominantly in the historically underinvested legacy Just Eat countries. Our consumer base, restaurant selection and order frequency have strongly increased, which will lead to improved profitability going forward," Chief Executive Jitse Groen said. In the six months to June 30, the online food delivery platform booked an operating loss of EUR355 million, sharply wider from the EUR11 million loss in the same period a year earlier. This followed a jump in courier costs to EUR1.02 billion from EUR181 million. Revenue more than doubled to EUR1.77 billion, however, from EUR675 million, as orders grew to 412.4 million, with 27% growth in the US to 134.4 million. Average transaction value slipped to EUR25.83 from EUR26.70.
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Glencore has invested in battery startup Britishvolt, the Financial Times reported. Britishvolt is a Blyth, Northumberland-based company planning to build a GBP2.6 billion factory on the site of a former coal power station to make batteries for electric vehicles. As part of the deal, Glencore will supply 30% of the cobalt that Britishvolt uses to make batteries from 2024 to 2030. Glencore did not disclose the size of its investment, but it will become one of the startup's largest backers, the newspaper said. Britishvolt is considering whether to go public in London or New York through a merger with a special purpose acquisition company, the FT added.
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COMPANIES - FTSE 250
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Contracts-for-difference trading platform Plus500 saw its first half revenue sink, as it was unable to match the amount of new customers from a year before. Pretax profit fell to USD188.7 million in the six months to June 30 from USD363.2 million a year before. Revenue dropped 39% year-on-year to USD346.2 million from USD564.2 million. Plus500's active customers grew 2% to 333,940, but its new customers in the period dropped 31% to 136,980. Average revenue per user was down 40% to USD1,037. Chief Executive David Zruia said: "Future growth will be delivered through continued organic investments in our business, our technology and targeted bolt-on acquisitions to further expand our CFD offering, launch new trading products, introduce new financial products and deepen engagement with our customers. Having increased our expectations for the outlook for the group, the board is increasingly confident that Plus500 will continue to deliver further growth and consistent levels of cash generation over the medium to long term."
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Tuesday's Shareholder Meetings
Eqtec PLC - AGM
Esken Ltd - AGM
IronRidge Resources Ltd - EGM
Remote Monitored Systems PLC - GM re transfer of shares in Gyrometric Systems, name change to Nanosynth
Semper Fortis Esports PLC - AGM
ULS Technology PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
