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Shell to Divest Interest in Woodside Petroleum for $1.7bn

Royal Dutch Shell plc revealed Monday that it will sell part of its stake in Woodside Petroleum Limited to equity investors for around $1.7 billion.

The company’s subsidiary, Shell Energy Holdings Australia Limited (SEHAL), has entered into an underwriting agreement with two investment banks for the sale of 71.6 million shares in Woodside, representing 64 percent of its interest in the company and 8.5 percent of the issued capital, at a price of A$31.10 per share, resulting in total pre-tax proceeds of approximately $1.7 billion (A$2.2 billion).

The sale is expected to complete on November 14.

“Today’s announcement contributes to our strategy to reshape Shell, to deliver a world class investment case and to strengthen our financial framework. Proceeds will contribute to reducing our net-debt. This is another step towards the completion of our three-year $30 billion divestment program,” a Shell spokesperson told Rigzone.

“We maintain a significant presence in Australia through interests in a number of LNG projects, both operated and non-operated,” the spokesperson added.

Upon completion of the sale, SEHAL will continue to own a 4.8 percent interest in Woodside. SEHAL has agreed that it will not dispose of any of its remaining shares in Woodside for a minimum of 90 days from completion of the sell-down, with limited customary exceptions.

In November 2010 Shell sold 10 percent of the issued capital of Woodside, retaining a 24.27 percent interest. This interest was further diluted to 23.08 percent because of Shell’s decision not to participate in Woodside’s dividend re-investment program.

In June 2014, Shell sold approximately 78.27 million shares in Woodside representing 9.5 percent of Woodside’s issued share capital, retaining an interest of 13.58 percent. This interest was further diluted to 13.28 percent due to Shell not participating in Woodside’s dividend re-investment program.

Outside of its interest in Woodside, Shell has the following interests in Australia:

  • QGC venture (Shell operated, majority interest)
  • Arrow Energy (Shell 50 percent interest)
  • Gorgon LNG (Shell 25 percent interest)
  • North West Shelf (Shell 16.67 percent interest)
  • Prelude FLNG project (Shell operated 67.5 percent interest)
  • Browse Development venture (Shell 27 percent interest)
  • Sunrise LNG joint venture (Shell 26.6 percent interest)
  • Shell Energy Australia (Shell 100 percent interest)

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