The Woodside Energy Group Ltd (ASX: WDS) share price is lifting on Thursday despite more than 900 million new shares in the energy giant hitting the market.
The shares were issued as part of the company's merger with BHP Petroleum International Pty Ltd. That's the oil and gas arm of BHP Group Ltd (ASX: BHP).
An expected selldown following their release might have been minimised by a reported block trade.
At the time of writing, the Woodside share price is $31.66, 4.84% higher than its previous close.
In earlier trading, it reached an intraday high of $32.06, up 6.2%. This is the highest price that the company has traded at since its renaming.
For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.92% right now. Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) is one of only two ASX sectors in the green today, gaining 2.73%.
Let's take a closer look at what's going on with Woodside on Thursday.
Woodside share price surges following block trade
More than 914 million new Woodside shares are being distributed to BHP shareholders today after the merger was completed.
Their release could have sparked a major sell-off event. However, a strategic block trade might have helped the now $57 billion energy monolith dodge it.
About 38 million shares in Woodside were auctioned off to institutional investors for $29.15 per share overnight, reports the Australian Financial Review (AFR). That has likely resulted in less churn of Woodside shares as BHP investors decide whether to keep or sell their allocated holdings.
Additionally, the publication noted an upcoming block trade generally sees institutional traders steering clear of the stock.
Thus, finalising the trade prior to today's open might have helped bolster institutional interest in Woodside stock.
JPMorgan was reportedly the sole book-runner of the $1.1 billion block trade.
The broker also noted that funds overweight in the ASX 200 energy sector will need to up their holdings in the much larger Woodside following the merger, reports The Australian. That could cause demand for the energy giant's stock to surge.
At the time of writing, more than 54 million Woodside shares have swapped hands on Thursday. That's more than the volume traded on Monday, Tuesday, and Wednesday combined.
