1x2 prediction by Mightytips

This Back-Page News Shows An Explosion Coming in Energy M&A

A relatively obscure newspaper globally wrote a single line this weekend — which may show that one of the biggest trends going in oil and gas is about to explode to a frenzy. 

This mention — from The Australian, a go-to news source for resource-heavy markets Down Under — came not as a headline, not even as a story lead. But was buried in the back-matter of another article.

But we might be hearing a lot about this tidbit soon. 

Here’s the quote, in its entirety:

“Meanwhile, there was renewed talk late last week about whether BHP Billiton was perhaps once again considering an acquisition of the $24bn oil and gas giant Woodside Petroleum.”

This is the first whiff in the press of a possible BHP takeover of Woodside. And if such an event does come to pass — the way “talk” is suggesting — it would be one of the biggest stories in energy this year. 

That’s because Australia has already been setting up the last few months as one of the hottest oil and gas markets on the planet. Boosted by news in August that former Chesapeake CEO Aubrey McClendon’s new energy fund is paying $100 million to get into licenses in the McArthur Basin. And cemented in late October when private equity firm Scepter Partners launched a mega-bid for major Aussie natural gas producer Santos. 

A bid for Woodside would take this M&Oz mania to a new level. With Woodside being the largest oil and gas producer in Australia — giving the deal world-leading scale in terms of size and reach. 

And there is reason to think it might happen. Shell has been trying to divest a legacy ownership position in Woodside, but meeting difficulties of late. A takeover from BHP (or others?) would give the major the liquidity it’s been pushing for. 

We’ve been (very subtly) warned. Watch for any news the next few weeks, which could give a serious lift to the Australian oil and gas sector. 

Here’s to reading the fine print,

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Dave Forest

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