Woodside to acquire Tellurian and its Driftwood LNG development

Liquid natural gas (LNG) company Woodside is buying LNG firm Tellurian, including its owned and operated US Gulf Coast Driftwood LNG development opportunity.

The transaction is valued at approximately $900 million, or $1.00 per share of outstanding Tellurian common stock.

“The acquisition of Tellurian and its Driftwood LNG development opportunity positions Woodside to be a global LNG powerhouse,” Woodside CEO Meg O’Neill said. “It adds a scalable US LNG development opportunity to our existing approximately 10 Mtpa of equity LNG in Australia. Having a complementary US position would allow us to better serve customers globally and capture further marketing optimization opportunities across both the Atlantic and Pacific Basins.”

The acquisition of Tellurian and its Driftwood LNG development opportunity will strengthen Woodside in several ways, including:

• Expanding Woodside’s position as a leading independent LNG company;
• Adding a high-quality, fully permitted US LNG development option to Woodside’s portfolio;
• Leveraging Woodside’s LNG development, operations and marketing expertise to unlock the development and create value;
• Enabling value creation from marketing optimisation with geographic diversification;
• Increasing long-term cashflow generation potential with a phased development to manage investment decisions aligned with Woodside’s capital allocation framework; and
• Supporting Woodside’s carbon competitiveness through increased exposure to LNG and potential to reduce the average Scope 1 and 2 emissions intensity of Woodside’s LNG portfolio.

“The Driftwood LNG development opportunity is competitively advantaged. Woodside expects to leverage its global LNG expertise to unlock this fully permitted development and expand our relationship with Bechtel which is the EPC contractor for both Driftwood LNG and our Pluto Train 2 project in Australia,” O’Neill. “Through this acquisition, we are delivering on our strategy to thrive through the energy transition. Woodside believes that LNG will play a key role in the energy transition and is well positioned to deliver the energy the world needs while delivering significant value to our shareholders.”

Woodside’s target of reducing net equity Scope 1 and 2 emissions by 2030, and aspiration for net zero by 2050, are unchanged.

For Tellurian, the acquisition price represents a 75 percent premium to Tellurian’s closing price on July 19 and a 48 percent premium to Tellurian’s 30-day volume weighted average price.

“Following our strategic repositioning in December, our new leadership has strengthened Tellurian’s position and advanced Driftwood LNG. Woodside’s offer reflects this progress, providing a significant premium to our share price,” Martin Houston, executive chairman, Tellurian board of directors, said. “After careful consideration of Tellurian’s opportunities and challenges, the Board and senior management weighed an immediate and significant cash return against the risks and costs associated with the timeline to FID and determined that this offer is in our shareholders’ best interest. Woodside is a highly credible operator, with better access to financial resources and a greater ability to manage offtake risk, and I am confident it is the right developer to take Driftwood forward.”

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