Woodside Petroleum Limited (ASX: WPL) announced this afternoon that it and BHP Billiton Limited (ASX: BHP) have entered into an agreement regarding the Scarborough gas field.
The company announced that under the agreement BHP will waive its right of pre-emption and provide consent to the sale by ExxonMobil to Woodside of its stake in WA-1-R and the Scarborough development. This means that Woodside will hold a 75% interest in Scarborough and that Woodside will be the operator of the gas field.
However, Woodside is granting BHP an option to purchase an additional 10% interest in Scarborough on equivalent terms to the transaction with ExxonMobil. This option can be exercised up until 31 December 2019.
Woodside and BHP will undergo discussions to unitise WA-1-R and the adjacent WA-62-R. They will also discuss potential offers to sell up to a 10% interest in the Scarborough project to foundation LNG buyers on a pro-rata basis.
The CEO of Woodside, Mr Peter Coleman, said "I am pleased BHP has agreed that Woodside will become operator of the Scarborough Development. The Scarborough joint venture will now be focused on finalising the development concept prior to interesting FEED and positioning for FID in 2020."
The Woodside Petroleum share price rose by 1.19% today. It's currently trading with a grossed-up dividend yield of 6.15%.
