March 12 (UPI) -- Australian energy company Woodside Petroleum said it's cleared to take on Exxon Mobil's 50 percent interest in the Scarborough gas field off the nation's coast.
Rival energy company BHP Billiton cleared the way Monday for the acquisition after waiving its right to pre-emption on the deal. As a result, Woodside increases its stake in Scarborough to 75 percent.
"I am pleased BHP has agreed that Woodside will become operator of the Scarborough development," Woodside CEO Peter Coleman said in a statement. "The Scarborough joint venture will now be focused on finalizing the development concept prior to entering front-end engineering design and positioning for a final investment decision in 2020."
Woodside reported a net profit after tax of nearly $80 million, an 18 percent improvement over 2017. Free cash flow increased to $660 million and the company said its break-even point was well below the current price of oil, which was around $65 per barrel for the global benchmark, Brent, early Monday.
The Australian energy giant becomes the operator of the gas field off the coast of Western Australia. In return, BHP has the option to buy into the Scarborough development on terms similar to those reached with Exxon.
Net reserves in the Scarborough area, which consists of three natural gas fields, are more than 9 trillion cubic feet of dry gas. Upon completion of the acquisition, Woodside estimates its net share of resources more than doubles.
Production gains are anticipated across Woodside's global portfolio, though the Scarborough acquisition gives the company a larger presence in the regional gas sector.
BHP and Exxon had no public comments on the arrangement. A mining giant, BHP said last month it was anticipating bids for its onshore U.S. shale natural gas holding during the first half of the year.
BHP said underlying profit for the second half of 2017 improved 25 percent from the same period last year to $4 billion. Exxon reported $8.4 billion in earnings from exploration and production, but most of that was a result of U.S. tax reforms that went into force this year.