Why is the ‘new’ Woodside share price leaping 6% today?

A block trade might have lessened pressure on Woodside today after more than 900 million new shares were released to BHP shareholders.

| More on:
A businessman leaps in the air outside a city building in the CBD.

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

  • The Woodside share price is surging despite more than 900 million new shares hitting the market this morning
  • The new securities will be issued to BHP shareholders after the company's petroleum assets were officially taken over by Woodside yesterday
  • A $1.1 billion block trade overnight has likely helped ease the pressure on the Woodside share price today 

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.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper 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 male executive worker wearing glasses and a blue collared shirt looks at his laptop screen with a concerned look on his face and his hand to his forehead as he watches his screen.
Energy Shares

Why did the Woodside share price lag the ASX 200 on Monday?

What went wrong with Woodside today?

Read more »

sad looking petroleum worker standing next to oil drill
Energy Shares

What’s impacting the Santos share price today?

Oil prices have been falling amid speculations of increasing supply and sliding demand.

Read more »

Earnings Results

Beach Energy share price tumbles 9% as production slides

What did Beach Energy report?

Read more »

A woman looks in anticipation at her laptop, watching eagerly.
Energy Shares

Hoping to pounce on AGL shares? Here’s what to watch when the energy giant reports this week

AGL is gearing up to post its full-year earnings on Friday.

Read more »

a man sits on a rocket propelled office chair and flies high above a city
Energy Shares

Up 26% in a month, is the Paladin Energy share price on the comeback trail?

Will this rally stick for the ASX uranium share after a tough trading year to date?

Read more »

boy dressed as an eco warrior and holding a globe.
Energy Shares

Origin share price dips amid fresh climate pressure from shareholders

Shareholders are asking the company to put climate sensitivity analysis front and centre.

Read more »

share price ASX mining shares buy coal miner thumbs up
Energy Shares

Why are ASX coal shares having such a stellar end to the week?

It's proving a cracking end to the week for these three ASX 200 coal shares.

Read more »

share price ASX mining shares buy coal miner thumbs up
Record Highs

Why did the Whitehaven Coal share price just hit an 11-year high?

Whitehaven shares have been on fire in 2022.

Read more »