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Reuters: UPDATE 1-Woodside to buy Shell’s North West Shelf oil assets

Sun Feb 10, 2008 5:10pm EST

SYDNEY, Feb 11 (Reuters) – Woodside Petroleum Ltd, Australia’s second-largest oil and gas producer, said it has agreed to buy Royal Dutch Shell’s oil assets in the North West Shelf off Western Australia for $398.5 million ($359 million).

The acquisition covers an estimated proved and probable (2P) reserves of 21.3 million barrels of oil equivalent (boe) and an additional 9.3 million barrels of contingent resources, Perth-based Woodside said in a statement on Monday.

Woodside said the purchase price was equivalent to $18.71 per barrel of oil equivalent for 2P reserves.

“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,” Woodside Chief Executive Don Voelte said in a statement.

The acquisition will increase Woodside’s participating interest in the Cossack, Wanaea, Lambert and Hermes fields in the North West Shelf to 33.33 percent, Woodside said.

The sale will also increase Woodside’s interest in the Egret oil discovery area and give it Shell’s oil exploration portfolio in the North West Shelf.

Woodside, which has said it may sell its remaining its assets in Africa to focus on its suite of liquefied natural gas (LNG) projects around Australia, said Shell would have a “right of final offer” on Woodside’s assets in Libya under a related agreement.

Shares in Woodside, 34 percent owned by Shell, closed 1.9 percent lower at A$44.85 on Friday.

The A$20 billion North West Shelf venture, operated by Woodside, accounts for more than 40 percent of Australia’s oil and gas production and is the country’s largest producer of LNG. The venture is also a major producer of natural gas, liquid petroleum gas, condensate and crude oil.

The six partners in the North West Shelf joint venture are Woodside, BHP Billiton Plc/Ltd (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research), Chevron (CVX.N: Quote, Profile, Research), BP Plc (BP.L: Quote, Profile, Research), Shell and Japan Australia LNG (MiMi) Pty Ltd, a joint-venture of Mitsubishi Corp (8058.T: Quote, Profile, Research) and Mitsui and Co (8031.T: Quote, Profile, Research). ($1=A$1.11) (Reporting by Fayen Wong; Editing by James Thornhill)

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