LNG

Cool Company Ltd, the LNG shipping joint venture formed between Eastern Pacific Shipping and Golar LNG has issued a business and financial update as it builds a modern fleet and prepares for a listing on the New York Stock Exchange after last year’s initial public offering.

Woodside Energy Group Ltd, the new name of Australian LNG plants operator Woodside Petroleum, and BHP Group have formally completed the merger of Woodside with BHP’s oil and gas portfolio to create a global energy company.

As a result of the merger, Woodside said it was a top 10 global independent energy company by hydrocarbon production and the largest energy company listed on the Australian Securities Exchange.

Woodside said the larger, more diversified portfolio was expected to deliver significant cash flow to help fund committed projects and shareholder returns.

Woodside Chief Executive Meg O’Neill said completion of the merger was one of the most significant events in Woodside’s 67-year history and marked the start of a new chapter for the company.

Diverse portfolio

“The merger delivers a diverse portfolio of quality operating assets, plus a suite of growth opportunities across oil, gas and new energy that promises ongoing value for our shareholders,” stated O’Neill.

Woodside has acquired the entire share capital of BHP Petroleum International and issued 914.76 million new Woodside shares to BHP, which BHP will distribute to its eligible shareholders.

Woodside will receive net cash of about US$1 billion, which includes the cash remaining in the BHPP bank accounts immediately prior to completion.

This reflects $1.8Bln of net cash flows generated by BHPP between the effective date of 1 July 2021 and completion, less $800 million representing BHP’s entitlement to cash dividends paid by Woodside over the same period.

All completion payment entitlements are subject to a customary post-completion review which may result in an adjustment.

The new Woodside shares start trading on the ASX on 2 June 2022. Trading of Woodside American Depositary Shares on the New York Stock Exchange would commence on the same date.

London trading

Woodside shares will be traded on the main market of the London Stock Exchange on 6 June 2022.

The company has commenced activities to integrate the two organisations, including standardisation of reporting across all jurisdictions.

Woodside said the updated production guidance, reserves position and other related information will be released in due course.

Woodside’s net profit after tax for the first half of 2022 will incorporate the contribution of the BHPP portfolio from completion and the accounting treatment of the BHPP portfolio will align with Woodside’s policies.

“We are focused on unlocking pre-tax annual synergies of more than $400 million as we merge the two businesses,” said O’Neill.

“It is exciting to welcome the BHP Petroleum team to Woodside Energy and start delivering on our shared vision for the future,” she added. 

Anglo-Australian commodities company BHP and LNG plant operator Woodside Petroleum have worked out the final point for Woodside’s takeover of BHP’s oil and gas portfolio.

BHP told its shareholders that the completion of the merger was on track for June 2022, subject to satisfaction of conditions precedent including approval by Woodside shareholders.

The commodities giant said it was expected to receive 914.8 million newly issued Woodside shares at completion a dividend on Woodside shares would go to BHP shareholders.

BHP shareholders are expected to be entitled to one Woodside Share for every 5.5340 BHP shares they hold on the record date.

Based on Woodside’s share price of US$25.55 at 6 April 2022, the implied value of BHP’s subsidiary BHP Petroleum is US$23.4 billion.

Woodside will retain its primary listing on the Australian Securities Exchange, though the company was seeking a standard listing on the London Stock Exchange and an American Depositary Receipts (ADRs) program on the New York Stock Exchange on completion of the merger.

“A share sale facility will be in place for small BHP shareholders who elect to participate and for shareholders who are ineligible to receive Woodside Shares,” said BHP.

BHP said that all required regulatory and competition approvals have been obtained, other than the National Offshore Petroleum Titles Administrator (NOPTA) approval which is expected prior to completion.

Separate to the receipt of Woodside shares on completion, Woodside will also make a cash payment to BHP of approximately US$830 million in relation to cash dividends paid by Woodside between the merger’s effective date of 1 July 2021 and completion.

This represents the cash dividend that would have been received by holders of the Woodside shares.

BHP in turn will make a cash payment to Woodside for the net cash flow generated by BHP Petroleum between the merger’s effective date of 1 July 2021 and completion.

From the effective date to 31 December 2021 only, this amounts to approximately US$900M.

Seapeak LLC, formerly known as Teekay LNG Partners and with interests in 47 LNG carriers, 20 mid-size liquefied petroleum gas carriers and seven multi-gas vessels, has formally taken the name of Seapeak and implemented several corporate changes.

The Teekay partnership in January 2022 officially became part of the US investment fund firm, Stonepeak Infrastructure Partners, and the renaming process to Seapeak began.

Seapeak’s ownership interests in these 74 vessels range from 20 percent to 100 percent and the company also owns a 30 percent interest in the Bahrain LNG regasification terminal in the Arabian Gulf.

The company said that effective from February 25 Teekay was converted from a limited partnership formed under the laws of the Republic of the Marshall Islands into a Marshall Island limited liability company.

“Accordingly, all of the rights and liabilities of Teekay LNG in its prior partnership form are automatically vested in Seapeak,” said a statement.

“Concurrent with the conversion, Teekay has changed its name from Teekay LNG Partners LP to Seapeak,” it added.

The changes extend to the stock exchange ticker symbols and those for outstanding securities.

Teekay’s New York Stock Exchange preferred units ticker changes from TGP to SEAL.

Oslo-listed bonds

Effective from March 1, 2022, the ticker symbols for Seapeak’s Norwegian Kroner-denominated bonds listed on the Oslo Børs will be changed from TKLNG05, TKLNG06 and TKLNG07 to SPK05, SPK06 and SPK07 respectively.

As regards the NYSE common units, these were delisted in January 2022.

Teekay had started its LNG business in 2004 and publicly listed as Teekay LNG Partners on the NYSE in 2005.

Over the next 18 years, the shipping line built an LNG franchise into the world’s third-largest independent LNG carrier owner and operator.

It also expanded the business into the LPG carriers sector and completed several highly specialized and complex projects.

These included building six Arc7 ice-breaker LNG carrier for the Russian Yamal LNG project and it became part of the joint venture in Bahrain to build and deliver the Arab kingdom’s regasification terminal.

GasLog Partners, the Greek LNG shipping company with a fleet of 15 vessels, reported a third-quarter increase in revenues and profits as global demand gathered pace.

Tellurian Inc., the owner of the Driftwood LNG export plant in Louisiana that has sealed supply deals with commodities trading firms Gunvor and Vitol, is transferring the listing of its own shares from the Nasdaq to the NYSE American, formerly known as the American Stock Exchange (AMEX) and now the third-tier exchange for US investors.

“Transferring our stock listing to the NYSE American allows us to leverage the exchange’s prestigious trading platform for our shareholders’ benefit,” said Tellurian Executive Chairman Charif Souki.

Tellurian said it expected its common stock to begin trading on the NYSE American on November 2, 2021 and will remain under the current ticker symbol “TELL”.

Trading of Tellurian shares on Nasdaq was expected to end at close of business on November 1, 2021.

The Houston, Texas-based company is moving towards the LNG plant construction phase after signing the Gunvor and Vitol LNG sales agreements in late May and early June 2021 for a combined 6 million tonnes per annum of cargoes from the Driftwood facility.

Each of the agreements is for a period of 10 years with the supply indexed to a combination of the Japan-Korea Marker for Asian spot cargoes and the European benchmark Dutch Title Transfer facility (TTF) price.

The engineering, procurement and construction contract has already been agreed with Bechtel Inc., the leading global builder of LNG export facilities.

The Driftwood plant with production capacity of around 27 MTPA and will be built on the west bank of the Calcasieu River, just south of Lake Charles.

Reasoning

In announcing the switch from Nasdaq to the NYSE American, Tellurian Chairman Souki said it comes at a time of “global natural gas shortages” and recent “history-making” prices

“This indicates the pressing need for additional liquefaction export capacity in the United States,” added Souki.

“Tellurian is poised to contribute to America’s status as an energy superpower, having achieved both regulatory permits and commercial success for Driftwood LNG phase one development,” he explained.

“We have turned our focus to putting together a world-class banking group and have started site preparation, in advance of giving our partner Bechtel notice to proceed with construction expected in the first quarter 2022,” stated Souki.

The Nasdaq and the NYSE American have different stock trading profiles.

Nasdaq (the National Association of Securities Dealers Automated Quotations) holds a higher trading volume per day than any other stock exchange in the world.

Nasdaq joined forces with AMEX in 1998 to create the Nasdaq-Amex Market Group. However, the merger was short-lived and the AMEX regained its independence in 2004.

Now called the NYSE American, the exchange includes the second-largest options trading market, though is now mainly regarded as a platform for small-cap and mid-cap stocks and derivatives.

“We’re excited to welcome Tellurian as it transfers to NYSE American and joins our community of innovators and disruptors,” said John Tuttle, Vice Chairman and Chief Commercial Officer of the NYSE Group.

“We look forward to working with Tellurian as it supplies the world with a reliable, clean energy supply,” added Tuttle.

Teekay LNG Partners has become the latest fleet owner to be targeted by a US investment fund with Stonepeak Infrastructure Partners setting up a deal worth $6.2 billion to acquire the Bermuda-based shipping line, which has a large portfolio of vessels under charter contracts and part ownership of a Middle East LNG import terminal.

GasLog Ltd., the Monaco-based LNG carrier fleet owner with 19 vessels and with another 15 ships held by its US affiliate GasLog Partners, said it signed an export credit agency-backed debt financing facility of $1.05 billion with 12 international banks for its current newbuilding programme.

McDermott International, the company involved in some of the world’s leading LNG construction projects, including several on the US Gulf Coast and the North Field Expansion in Qatar, said it had been formally notified by the New York Stock Exchange that it was not meeting price requirements for future listing.

Flex LNG, the growing shipping company with six vessels operating and seven others on order and whose largest shareholder is Norwegian magnate John Fredriksen, reported favourable market conditions in the second half of 2019 even in the face of lower natural gas prices.