The Woodside Energy Group Ltd (ASX: WDS) share price can't shake off the wider market sell-down today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $23.55. In morning trade on Thursday, shares are swapping hands for $23.16 apiece, down 1.7%.
For some context, the ASX 200 is down 2.0%, following steep losses in US stock markets overnight.
So far, investors have yet to react positively to Woodside's announcement this morning that the company is working to simplify its portfolio.
Woodside share price dips despite Chevron agreement
The Woodside share price is in the red despite the company reporting that it's agreed to an asset swap with Chevron Corp (NYSE: CVX).
Under the deal, Woodside will acquire Chevron's interest in the North West Shelf (NWS) Project, the NWS Oil Project, and the Angel Carbon Capture and Storage (CCS) Project.
In return, Woodside will transfer all of its interest in the Wheatstone and Julimar-Brunello Projects to Chevron and make a cash payment of up to $400 million to Woodside.
"The strategic and commercial rationale for this asset swap is compelling for Woodside," Woodside CEO Meg O'Neill said.
Highlighting the potential future benefits for the Woodside share price, the company noted that the transaction will:
- Streamline Woodside's Australian portfolio and consolidate its focus on operated LNG assets
- Simplify Woodside's NWS joint venture ownership, unlocking economic recovery of existing production and future development opportunities
- Strengthen near-term cash flow to support dividends for shareholders and ongoing investments
"This transaction simplifies our portfolio, improving our focus and efficiency by consolidating our position in our operated LNG assets," O'Neill said. "It is immediately cash flow accretive and includes a cash payment upon both execution and completion."
O'Neill added:
This year, the North West Shelf Project and its Karratha Gas Plant celebrated 40 years of operations. The Western Australian government's recent decision to extend the environmental approval for the North West Shelf Project supports its ongoing contribution to reliable energy supply for local and global customers.
This transaction creates greater opportunity to fill emerging processing capacity and maximise value accretive recovery from the North West Shelf Project. It also provides greater alignment and improves the commercial prospects for the proposed Browse to North West Shelf Project.
With an eye on mitigating climate change, O'Neill noted that the deal with Chevron will improve joint venture planning for decarbonisation opportunities at the Karratha Gas Plant.
"Our increased equity in the Angel CCS Project also supports future development of this large-scale, multi-user carbon capture and storage hub in Western Australia," she said.
Facing headwinds from slumping oil prices, the Woodside share price is down 26% in 2024.
