Why is the Woodside share price dropping 4% today?

Woodside shares are ending the week in the red…

| More on:
a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Woodside shares are ending the week in the red
  • This follows softer oil prices and news that its merger with BHP's petroleum assets is going ahead
  • BHP shareholders will receive new Woodside shares at the start of June

The Woodside Petroleum Limited (ASX: WPL) share price is on course to end the week with a decline.

In afternoon trade, the energy producer’s shares are down 4% to $28.75.

Why is the Woodside share price sliding on Friday?

There appears to have been a couple of catalysts for the weakness in the Woodside share price on Friday.

One is a slight pullback in oil prices during Asian trade. This has seen the WTI crude oil price fall 1.2% to US$110.85 a barrel and the Brent crude oil price fall 0.6% to US$111.35 a barrel.

In addition to this, it is worth highlighting that Woodside shareholders have just approved the merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

BHP-Woodside petroleum merger

Following the receipt of shareholder approval, BHP and Woodside look set to merge their petroleum assets on 1 June.

This will see Woodside issue 914,768,948 to BHP as part of the merger process. These shares will then be distributed to eligible BHP shareholders via an in specie dividend. They will receive one new Woodside share for every 5.534 BHP shares they hold.

It is possible that some of the weakness in the Woodside share price today could be due to selling from investors that already hold shares in both companies. Given that these investors now know the amount of Woodside shares they will receive when the merger completes, they could be trimming their existing holding in Woodside to balance their portfolio.

Woodside name change

A final thing to note, is that as part of the merger process, Woodside will soon be having a slight name and ticket code change.

From Wednesday 25 May, the company will go from being Woodside Petroleum Ltd with the WPL ticker code, to Woodside Energy Group Ltd with the WDS ticker code.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A wide-smiling businessman in suit and tie rips open his shirt to reveal a green t-shirt underneath
Energy Shares

Hazer shares climb 8% amid CEO appointment

The hydrogen producer's shares are off to a flying start on Wednesday.

Read more »

Oil worker drilling on the oil field
Energy Shares

Why are ASX 200 energy shares surging today?

Energy shares are extending their rally today amid a global uptick in energy commodity prices.

Read more »

a gas worker with hard hat and high visibility vest stands cross armed and smiling in front of an elaborate steel structured gas plant.
Energy Shares

Own Santos shares? This analyst expects gas prices to grow through to 2025

Could rising gas prices help the Santos share price?

Read more »

A Santos oil and gas worker wearing a hard hat stands in a yellow field looking at blueprints with an oil rig and blue sky in the background
Energy Shares

ASX 200 energy shares are having a ball today, what’s fuelling it?

We take a look at why these ASX200 energy shares could be leaping ahead today.

Read more »

An oil refinery worker stands in front of an oil rig with his arms crossed and a smile on his face as the Woodside share price climbs today
Energy Shares

Here’s why the Woodside Energy share price is green all over today

Rising oil prices might be bolstering this ASX 200 energy giant today.

Read more »

A young boy flexes his big strong muscles at the beach.
Energy Shares

What fuelled the Beach Energy share price 4% higher today?

Investors rallied up Beach Energy shares throughout the day. Here's why.

Read more »

Share Market News

Down 60% in 2022, what’s happening to the Pure Hydrogen share price?

What on earth is going on with Pure Hydrogen shares?

Read more »

Builder looking at ipad standing in front of solar panels
Energy Shares

Sun Cable moves another step closer to its day in the sun

Australia could soon be a massive exporter of renewable energy.

Read more »