14/12/2009 - 06:52

Woodside in $2.5bn capital raising

14/12/2009 - 06:52

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Woodside Petroleum is tapping shareholders for $2.5 billion to bolster its balance sheet ahead of several planned liquefied natural gas developments.

Woodside in $2.5bn capital raising

Woodside Petroleum is tapping shareholders for $2.5 billion to bolster its balance sheet ahead of several planned liquefied natural gas developments.

Australia's second largest oil and gas producer today also said its calendar 2009 production will be at the lower end of guidance.

Woodside today launched a fully underwritten institutional and retail entitlement offer that will allow shareholders to purchase one new share for every 12 shares held, at $42.10 a share.

Woodside shares were placed in a trading halt this morning and last traded at $47.18.

The Perth-based company said in a statement that the trading halt would remain until December 17 when it would announce the outcome of the institutional component of the offer.

It said its largest shareholder Shell, which has a stake of about 34 per cent, had confirmed it would take up its full entitlement under the offer in an investment worth about $862 million.

Woodside said the capital raising would increase liquidity as it prepared for LNG developments including the expansion of its $12 billion Pluto project, near Karratha in Western Australia.

Gas production from the first stage of the project is slated to start late next year, with first LNG output expected in early 2011.

The company's other key LNG projects are Sunrise, offshore from Darwin near Timor Leste's territorial waters, and Browse, off WA's Kimberley coast.

Woodside flagged in February it could need up to $US1.7 billion ($A1.87 billion) in additional funding for 2009, then issued $US1 billion ($A1.1 billion) in corporate bonds into the US market.

Many analysts said they expected Woodside would continue to tap the US bond market, but rumours of an equity raising persisted.

In a conference call to journalists, Woodside chief executive Don Voelte said the capital raising was necessary as the company's growth profile had changed since the federal and state governments' conditional offer over Browse.

Earlier this month, the governments offered to renew the Browse licences if the partners agreed on a number of conditions, including a LNG processing facility location within the next four months, a minimum spend of $1.25 billion within three years and a final investment decision by the end of 2012.

Woodside is keen to construct the facility at the state government location of James Price Point while it's understood the other partners prefer to use existing infrastructure at North West Shelf.

The joint venture is led by Woodside and includes BP, Chevron, Shell and BHP Billiton.

Mr Voelte said today the partners are continuing to individually assess the governments' conditions and will all meet up either later this week or next week.

The Browse partners have 30 days to accept the licence renewal offer.

Woodside also said on Monday that its production for the 12 months to December 2009 would be "at or about 81 million barrels of oil equivalent (mmboe)", subject to the impact of any cyclone activity and performance of facilities.

It said in late November that it expected to produce between 81 mmboe and 86 mmboe in calendar 2009.

Woodside reaffirmed it 2010 output guidance of 70 mmboe to 75 mmboe, following the sale of its non-core 51.55 per cent interest in the Otway gas project in Victoria to joint venture partner Origin Energy Ltd.

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