Woodside leaves the door open for an improved Oil Search bid

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Woodside Petroleum has clarified its position on its, so far unwelcome, $11.65 billion bid for Oil Search.

The energy company today released a statement after a Dow Jones Newswire report said Woodside had no intention of adjusting its bid for Oil Search because the proposal was “fair and fully priced”.

The company said CEO Peter Coleman did say the proposal was “fair and fully priced”, but did not make the remainder of the statement.

Dow Jones quoted Coleman at an energy conference in Singapore as saying: “We knocked on the door and said hello and they ran out the back door.”

Oil Search says the Woodside bid is “highly opportunistic and grossly undervalues” the Papua New Guinea-based oil and gas company.

Chairman Rick Lee says: “We have a low cost, high quality, production base which is generating strong cash flows and excellent growth opportunities, with the proposed PNG LNG Train 3 and Papua LNG among the most competitive new developments in the world.”

Under the Woodside offer, Oil Search shareholders would receive 0.25 Woodside shares for every Oil Search share, valuing the bid at $11.65 billion.

Woodside has been buying assets in a depressed market. The company bought out Texas-based Apache Corporation’s interests in the Australian Wheatstone natural gas project, plus the Balnaves oil and the Kitimat gas projects in Canada for a total of US$2.75 billion (AU$3.348 billion).

Woodside shares were down 2.5% today to $30.27. Oil Search as down 0.66% to $7.55.