Ann: Woodside agrees to acquire half of BHPB's Scarborough assets,BHP-WPL.AX, page-13

The AFR published an article on the purchase today. Here is the link

http://www.copyright link/business/...ias-loneliest-gas-to-woodside-20160905-gr91ak

Here are some quotes
"First, Woodside spends about $US3 in exploration costs for every barrel of oil equivalent it adds to its reserves and resources. This deal adds certain gas with good prospects of development at some point in the next decade or so at a cost of US90 cents BOE. In other words, it has proven cheaper to buy into Scarborough than it would be to find an equivalent amount of gas."

"The reasons that Scarborough gas has stayed where it was found is that neither BHP nor Exxon have the infrastructure that makes its development sensible. But Woodside  has the machinery  for LNG and, arguably, is just that little bit short of gas in the right places to fill it."

"Both the NWS and Pluto are supplied by gas fields that sit, neatly enough, at the half way point of the journey from the coast to Scarborough and its fellow travellers. And, for good measure, the Pluto production system was built to take twice the gas that it currently sends to fill the single train that is the Pluto LNG processor. The Pluto production system was built to sustain two trains. But Woodside was never able to find the gas to fill the system. "

"Just generally, this is a deal that, to some degree, completes the Woodside portfolio that Coleman set out to create two years ago. "For the first time since I have been here Woodside is starting to develop the breadth and granularity in the portfolio that give us the options to move forward the way we want to," Coleman told me on Monday."

IMO, this is another "Senegal deal". i.e. buying options to develop O&G cheaply. PC is buying "straw hats in winter" and setting WPL up for the next 15 years with growth options that could well mean that WPL is one of the best O&G companies in the world.

HT1