Australia’s Woodside Energy raised $2 billion in the U.S. bond market, it said on Friday, driving it shares lower on growing worries over the oil and gas producer’s capital expenditure plans.
The bond issue was in two tranches — $1.25 billion via 10-year bonds with a coupon of 5.1% and $750 million through 30-year bonds with a coupon of 5.7%.
Woodside, Australia’s top gas producer, said the funds would be for general corporate purposes, without disclosing any details.
Ratings agency Standard & Poor’s thinks the company could use the money to partly fund two recent acquisitions that total more than $3 billion.
The company’s shares fell as much as 2.2% to their lowest since late January 2022, also pressured by crude oil prices near 14-month lows.
“Woodside shares have been in the firing line over the past week, with sinking crude prices and concerns over its capex direction taking a toll on the stock price,” said Tim Waterer, a market analyst at KCM Trade.
“From an investor standpoint, there are question marks over whether the funds will be used to expand core business activities or instead be injected into developmental projects, which may not generate the desired returns in the short to medium term.”
Woodside has also drawn investor and activist ire over its strategy for curbing carbon emissions. In April, shareholders rejected the company’s climate plan.
Since then, the company has announced the $2.35 billion purchase of a clean ammonia project in Texas and the $900 million acquisition of an LNG terminal in Louisiana.
(Reporting by Rishav Chatterjee in Bengaluru and Lewis Jackson; Editing by Subhranshu and Savio D’Souza)