Woodside’s Tellurian Acquisition – Introduction
In a strategic move to bolster its global liquefied natural gas (LNG) presence, Australian energy giant Woodside Energy Group has agreed to acquire Tellurian Inc. for approximately $900 million in an all-cash transaction. This acquisition grants Woodside access to Tellurian’s fully permitted Driftwood LNG project, positioning the company as a formidable player in the Atlantic Basin LNG market.
Strategic Rationale and Synergies
Woodside’s acquisition of Tellurian aligns with its strategy to thrive through the ongoing energy transition. The deal provides Woodside with a pre-FID development option that complements its existing Australian LNG position, offering expansion potential and diversification. By leveraging its deep LNG capabilities, Woodside aims to advance the Driftwood project and capitalize on marketing opportunities across the Atlantic and Pacific regions.
Market Context and Competitive Landscape
Despite the growing focus on renewable energy, fossil fuels still dominate the global energy landscape, accounting for 82% of total primary energy consumption in 20221. The LNG market is witnessing increased competition, with players like Woodside seeking to expand their global presence and capitalize on shifting consumer demands.
“This acquisition represents a significant step in our disciplined growth strategy and advances Woodside’s entry into the U.S. LNG market,” said Meg O’Neill, Woodside’s CEO.
Financial Implications and Shareholder Value
The $900 million acquisition price represents a 75% premium to Tellurian’s closing price on July 19, 2024, and a 48% premium to its 30-day volume-weighted average price. The implied total enterprise value, including net debt, is approximately $1.2 billion. This transaction provides substantial and certain value for Tellurian shareholders, reflecting the progress made by the company’s leadership in advancing the Driftwood LNG project.
