Woodside Plans to Invest more in LNG Projects

Submitted by Jim Thesiger on 14 December, 2009 - 17:16

Australia based Woodside Petroleum (WPL) is planning to raise $2.5 billion through equity offer in an attempt to achieve a stronger balance sheet as the company is looking forward to move with its liquefied natural gas (LNG) projects. Royal Dutch Shell, a major stakeholder will invest an additional $862 million in the company's shares to retain 34 percent of the stake and is expected to take up its entitlement in full. Woodside has ambitious plans of emerging as the largest LNG producer of the world by the year 2020 which might bring in a considerable amount of investment in this sector something that can help Australia to appear as the biggest exporter of LNG in the global market. According to Woodside, under its fully underwritten accelerated renounceable entitlement offer, the investors will be allowed to buy one new share of the company for holding every 12 shares.

The price of the new shares is going to be $42.10 per share- a 10 percent discount to the price in which it was traded earlier. It is to be mentioned that the Woodside shares will remain halted from trading in the stock market while the institutional placement is carried out and the trading will re-start on 17th of December. Woodside has plans to make an offer to its retail investors as well. However, the company is not providing any details about that. The company also stated that it expects to see a significant drop in the full year production of oil and gas in 2010 to 70 million-75 million barrels of oil equivalent. One of the main reasons behind this is that it sold one of its Australian assets to raise money for its LNG operations.

The company authority also declared that the 2009 production of the company will marginally remain in the line along with the market expectations. The Pluto Train project of the company is 82 percent complete and is expected to start operating in late 2010. Because of the scarcity of skilled trades (like welders and drillers), Woodside forecasted a rise in its expenditures for Pluto last month by as much as $1.1 billion.