SYDNEY (Thomson Financial) - Australia's largest oil and gas producer Woodside Petroleum Ltd said Monday it has agreed to acquire Royal Dutch Shell unit Shell Development Australia Pty Ltd's oil assets in Australia's North West Shelf for 398.5 million US dollars, effective August 1, 2007.
Shell's assets in the offshore oil and gas province include its share in the Cossack, Wanaea, Lambert and Hermes oil fields, including the Cossack Pioneer production facility, the Egret oil discovery and the remaining active oil exploration portfolio within a tieback distance to the Cossack Pioneer.
Woodside, which is 34 percent-owned by Royal Dutch Shell group, said the North West Shelf oil asset transfer is subject to standard regulatory and joint venture participant approvals, additional approvals by the Woodside board and shareholders, as well as the board of Shell.
The sale will increase Woodside's participating interest in the Cossack, Wanaea, Lambert and Hermes fields to 33.33 percent.
The company's interests in the Egret oil discovery area and remaining active oil exploration portfolio within a tieback distance to the Cossack Pioneer will increase to 50 percent.
Woodside chief executive Don Voelte said the acquisition of Shell's North West Shelf oil interests would further boost the company's strong cash flow and earnings.
'The North West Shelf has laid a sound business platform for Woodside over two decades and we are very pleased that this transaction will further consolidate our position in the North West Shelf Ventures,' said Voelte.
The agreement covers estimated proved and probable reserves of 21.3 million barrels of oil equivalent and an additional 9.3 million barrels of contingent resources.
Woodside said the purchase price is equivalent to 18.71 US dollars per barrel of oil equivalent for proved and probable reserves.
In a related agreement, Shell will have a 'right of final offer' for Woodside's assets in Libya should Woodside agree to proceed with a sale.
Woodside is examining its options in relation to its remaining African assets, which may include further sales of these assets.
The group said any sale of Woodside's Libyan interests would be subject to an acceptable offer being received, any preemption rights of the company's Libyan joint venture participants and required approvals by Libyan government authorities.
bruce.hextall@thomson.com - bhx/ng COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.