Woodside Petroleum Ltd. agreed to buy ConocoPhillips’s assets in Senegal for $350 million to gain a stake in exploration blocks off the West African nation.
ConocoPhillips holds 35 percent of a contract with the Senegal government covering three offshore blocks, Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore, Perth-based Woodside said in a statement to the stock exchange Thursday.
“This is a gutsy move from Woodside, which will only pay off in a long term recovery in oil price, making it a classic counter cyclical acquisition,” Neil Beveridge, an analyst at Sanford C. Bernstein & Co. in Hong Kong, wrote in a research note Thursday. “Woodside are paying in our view a fair price to enter what looks to be a world class deep water license.”
Woodside shares fell 1 percent to A$26.78 in Sydney at 3:17 p.m. local time. The S&P/ASX 200 Index was up 0.3 percent.
Woodside also agreed to pay about $80 million on the deal’s completion. The acquisition includes the option for Woodside to operate the future development of any resource, the Australian company said.
“It builds on our agreement to acquire a 65 percent interest in the AGC Profond exploration block located to the south in the Senegal-Guinea Bissau joint development zone and extends our regional focus in West Africa,” Chief Executive Officer Peter Coleman said in the statement.