Carnarvon Energy to scale heights with play for Woodside’s Pyrenees & Macedon assets

Australian listed energy groups may be getting busy on the acquisitions front, with talk of interest in Woodside Energy’s Pyrenees and Macedon oil and gas projects up for sale through Morgan Stanley.


DataRoom understands bids for the assets, which are expected to sell for between $500m and $1bn, are due next month.
Among the groups set to put in an offer are Carnarvon Energy. Carnarvon, the joint owner of the Dorado project in Western Australia with Santos, has a market value of $270m but now has $175m of cash on its balance sheet which it is keen to put to work.
Canarvon recently finalised a deal with Taiwan’s CPC Corp to sell a 10 per cent stake in its Dorado and Pavo projects, about 140km off the cost of Port Hedland, for an all-up payment of $US146m.
Other groups believed to be keen are Beach Energy and Cooper Energy. However, the talk is that both need funding partners and are in the market hunting for a joint venture suitor.
And sourcing funding, particularly debt, for oil and gas is never an easy assignment as investors favour renewable energy opportunities amid concerns over climate change impacts.
The $300m Cooper Energy has $81m of net debt, and some say that it needs its $77m of cash for its own growth assets. Yet when Eni’s Australian oil and gas portfolio was on the market in 2020, it launched a bid with Morgan Stanley Infrastructure Partners, so perhaps it rekindles that relationship.
Cooper Energy owns the Orbost gas processing plant and the Athena gas plant in Victoria and has offshore gas and gas liquids production in the Gippsland Basin and Otway Basin, both in Victoria.
Beach Energy has a $3.6bn market value, yet it is amid a change in leadership, incoming chief Brett Woods not set to start in the job until next year.
Its challenge is that its 30 per cent shareholder, the Ryan Stokes-led Seven Group, is keenly focused on the company’s dividend payments and would not want any deal that would jeopardise shareholder returns.
Woodside inherited the two gas facilities through its acquisition of BHP’s petroleum business last year.
The oil and gas producing assets are in Western Australia’s Carnarvon Basin.
Woodside has a 71.4 per cent interest in the Macedon field and a 62 per cent holding in Pyrenees, which it operates.
The assets have sustained production into the mid 2030s, although Woodside took a $US68m writedown on Pyrenees at its results last month.
It comes at a time that major energy producers such as Santos and Woodside look to international locations for growth options, namely the Gulf of Mexico or the US.
They are keen to diversify away from the Australian gas market, constrained by gas price caps on the east coast.
The other local deal in the oil and gas market involves the sell down by Santos of its 80 per cent share in Dorado through Goldman Sachs.
The suggestion in the market is that Santos may be keen to reduce its exposure to about 60 per cent, with CPC Corp tipped as the most likely candidate to pick up the additional interest.