The Woodside Petroleum Limited (ASX: WPL) share price has come under pressure on Wednesday after a pullback in oil prices overnight offset the release of a positive announcement.
At the time of writing, the energy producer's shares are down 2% to $23.63.
What did Woodside announce?
This morning Woodside announced that it has completed the acquisition of the entire participating interest of FAR Senegal in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture.
According to the release, the purchase price was US$45 million plus a working capital adjustment of approximately US$167 million. The latter is to reflect the acquisition effective date of 1 January 2020.
However, the final completion payment to FAR Senegal, after adjustments and the remedying of FAR Senegal's defaults under the joint operating agreement, was approximately US$126 million. Additional payments of up to US$55 million are contingent on future commodity prices and timing of first oil.
Major milestone coming
Woodside's Acting CEO, Meg O'Neill, was pleased with the news and notes that the Sangomar project is proceeding as planned.
She said: "The continued safe execution of the Sangomar project is a key priority for Woodside in 2021. A major milestone is expected tomorrow with the arrival of the Ocean BlackRhino drillship in preparation for commencement of development drilling next week."
"The construction of the floating production storage and offloading facility, which is a converted oil tanker, is well underway and we are receiving delivery of subsea equipment in Senegal."
O'Neill spoke very positive about the resource and expects it to be a boost to its revenues from 2023. She explained: "Sangomar is a world-class resource which will deliver near-term production and revenue for Woodside. We are targeting first oil in 2023."
The Sangomar Field Development Phase 1 will comprise a stand-alone floating production system with a production capacity of approximately 100,000 barrels per day, 23 subsea wells, and supporting subsea infrastructure.
As a result of this acquisition, Woodside's participating interest in the RSSD joint venture has increased to 82% for the Sangomar exploitation area and to 90% for the remaining RSSD evaluation area. However, it still intends to sell down its participating interest to approximately 40% to 50% in the second half of 2021.
