A merged Woodside is now a top-ten global player

With the merger of Woodside Energy’s (ASX: WDS) and BHP’s (ASX: BHP) oil and gas portfolio now complete, new Woodside shares are expected to commence trading on the ASX tomorrow (2 June 2022).

In summary, Woodside acquired the entire share capital of BHP Petroleum International Pty Ltd (BHPP) and issued 914.7m new Woodside shares to BHP. As of tomorrow, Woodside will become the eighth largest stock on the ASX 200 index with a market capitalisation of $57.8bn.

As a top 10 global independent energy company by hydrocarbon production and the largest energy company listed on the ASX, management expects the company’s more diversified portfolio to deliver significant cash flow to help fund the company’s energy transition and shareholder returns.

Cash flow boost

According to ratings agency S&P Global, a material boost to cash flow will come from a doubling in production capacity to around 193m barrels of oil equivalent a year.

Woodside’s net profit after tax for the first half of FY22 is expected to incorporate the contribution of the BHPP portfolio.

Woodside will receive net cash of around $US1bn, including the cash remaining in the BHPP bank accounts immediately prior to completion.

This reflects $1.8bn of net cash flows generated by BHPP between the effective date of 1 July 2021 and completion, less $800m which represents BHP's entitlement to cash dividends paid by Woodside over the same period.

Major synergies

Woodside CEO Meg O’Neill advised the market today that the company is focussed on unlocking $400m-plus in pre-tax annual synergies after completing its massive merger with BHP.

"We believe the completion of the merger will enable Woodside to play a more significant role in the energy transition that is imperative as we respond to climate change while ensuring reliable and affordable supplies of energy to a growing and aspirational global population," O'Neill says.

Woodside's share price ascent over 12 months.