BUZZ-Citi sees Chevron deal to be positive for Woodside in short-term but risky in long run

Reuters12-20 06:37
BUZZ-Citi sees Chevron deal to be positive for Woodside in short-term but risky in long run

** Citi expects Australia's Woodside Energy's WDS.AX asset swap deal with Chevron to be earnings accretive to Woodside in the near term

** Brokerage sees a Final Investment Decision $(FID.AU)$ for Woodside's Browse resource to be highly accretive, but highlights that FID appears unlikely

** Increases estimate for CY26 earnings by 54% following the asset swap

** Also expects deal in helping Woodside to preserve dividend payout ratio

** However, Citi highlights risks of deal in the long run; warns about higher abandonment liabilites and exacerbating portfolio degradation

** Cuts PT to A$21.50 from A$23, citing decline in gas contract prices

** WDS price has closed 1.9% lower on Thursday, following announcement of deal

** Stock has fallen 25.6% this year, as of last close

(Reporting by Nichiket Sunil in Bengaluru)

((Nichiket.Sunil@thomsonreuters.com))

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