Woodside (ASX:WDS) Shares Rise After $2.35 Billion Acquisition of Beaumont Low-Carbon Ammonia Project

August 07, 2024 02:54 PM AEST | By Team Kalkine Media

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Woodside (ASX:WDS) Shares Rise After $2.35 Billion Acquisition of Beaumont Low-Carbon Ammonia Project — Image source: shutterstock

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Shares of Woodside Petroleum (ASX:WDS) experienced a modest increase on Wednesday, rising by 2.15% to AU$25.66 following the announcement of a significant acquisition. Earlier this week, Woodside revealed its decision to acquire OCI Global’s Beaumont low-carbon ammonia project in Texas for AU$2.35 billion. This move marks a notable expansion of Woodside’s portfolio into the low-carbon energy sector, reflecting the company’s strategic focus on transitioning to more sustainable energy solutions.

The Beaumont acquisition has been met with positive reactions from industry analysts, particularly those at Morningstar. The brokerage firm has expressed a favorable outlook on the deal, suggesting that Beaumont will play a crucial role in Woodside’s broader energy transition strategy. Morningstar analysts highlight that the project aligns with Woodside’s objectives to invest in low-carbon technologies, which is part of the company’s plan to allocate AU$5 billion towards meeting its Scope 3 emissions targets by 2030.

Morningstar’s report underscores that Beaumont will become a material component of Woodside’s investment strategy aimed at reducing carbon emissions. The project, which focuses on the production of low-carbon ammonia—a key element in various clean energy technologies—represents a strategic asset that could enhance Woodside’s position in the evolving energy market. Despite the recent positive news, Morningstar continues to view Woodside shares as undervalued, suggesting that the market has not yet fully recognized the potential benefits of the Beaumont acquisition.

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