Woodside Energy Group Ltd (ASX: WDS) shares are marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $26.19. In morning trade on Tuesday, shares are changing hands for $26.42 apiece, up 0.9%.
For some context, the ASX 200 is down 0.5% at this same time.
Woodside shares should be getting some extra support today with the Brent crude oil price up 2.3% overnight to US$70.04 per barrel. This follows threats from United States President Donald Trump to implement tough new sanctions on oil-rich Russia if the nation doesn't halt its war with Ukraine within 10 to 12 days.
The oil and gas giant also released an update this morning on its Australian operations.
Here's what we learned.
Image source: Getty Images
Woodside shares in focus amid ExxonMobil agreement
In an announcement deemed non-price sensitive to Woodside shares, the company reported that it has agreed to assume operatorship of the Bass Strait assets, located offshore Victoria.
Woodside said its "historic agreement" with Exxon Mobil Corp (NYSE: XOM) Australia will open the door for more potential gas developments at Bass Strait. The company said it has identified four potential development wells that could deliver up to 200 petajoules of gas.
Woodside will assume operatorship of the offshore Bass Strait production assets, the Longford Gas Plant, the Long Island Point gas liquids processing facility, and associated pipeline infrastructure. ExxonMobil's and Woodside's equity interests in the assets and current decommissioning plans and provisions remain unchanged.
The ASX 200 energy stock expects the economies of scale achieved by the agreement to realise over US$60 million in synergies from the Bass Strait after deducting transition and integration costs.
What did management say?
Commenting on the agreement that could offer long-term support for Woodside shares, Liz Westcott, Woodside COO Australia, said, "Taking operatorship of Bass Strait demonstrates Woodside's continued commitment to meeting Australia's domestic energy demand while maximising the value of existing infrastructure."
ExxonMobil Australia chair Simon Younger added:
After operating the Gippsland Basin Joint Venture for more than 50 years, we are proud to be handing over the reins and transitioning our highly experienced Bass Strait workforce to our valued partner Woodside, a world-class operator.
The companies aim to complete the agreement in 2026. It remains subject to conditions precedent including obtaining regulatory approvals.
Woodside share price snapshot
After a rough 20 months of selling, commencing in September 2023, Woodside shares took a sharp turn for the better in April.
Year to date, shares are up 5.9%, with the ASX 200 energy stock now up 38.0% since the recent closing lows on 9 April.
