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The Strike Energy Ltd (ASX: STX) share price has jumped more than 7% in early trade after a strong production test update from the Aussie energy company.

Why is the Strike Energy share price climbing?

Strike reported that it has conducted a selective perforation at its West Erregulla 5 well. The Aussie energy group said it has subsequently observed gas flows to the surface in the production test in good news for shareholders.

Perforation#1 was made over a 6-metre interval at the bottom of the Kingia Sandstone pay zone at a depth of 4,641 to 4,647 metres.

The Strike Energy share price has shot higher on the back of this morning’s news. That’s on the back of the testing confirming the existence of a gas prone reservoir throughout the site.

Strike said these initial West Erregulla 5 flow test observations “provide further support and corroborate other data points that the gas water contact of the West Erregulla gas field has not been observed in the drilling to date and likely lies at a depth of around 4,720m ss”.

The good news has sent the Strike Energy share price soaring more than 7% in early trade. Shares in the Aussie energy company are now up 56% in the last year following this morning’s news.

What’s next for the West Erregulla site?

Strike will now execute Perforation #2 and conduct a full flow testing program at WE5 following the discovery. The company will then suspend the well as a future producer for the proposed Phase 1 87 TJ/d development of the West Erregulla gas field.

The post Why the Strike Energy (ASX:STX) share price is surging 7% today appeared first on The Motley Fool Australia.

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• Strike Energy (ASX:STX) share price see-sawing today
• Strike Energy (ASX:STX) share price charges higher on “transformational” outlook
• Here’s why the Strike Energy (ASX:STX) share price is surging today

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Airtasker Ltd (ASX: ART) share price has opened higher on Thursday after the company announced its June quarter results.

At the time of writing, shares in the freelancing marketplace are up 5% trading at $1.01 after shooting up to an early morning high of $1.04.

Airtasker share price tips higher on quarterly results

In today’s release, Airtasker said it delivered a positive cash flow from operating activities of ~$763,000 in the fourth quarter.

For the full year FY21, cash flow from operating activities was $7.4 million while statutory cash flow from operating activities was $5.5 million, greatly exceeding the company’s prospectus forecast of $0.1 million.

Airtasker continued to top prospectus expectations, with FY21 gross marketplace volume (GMV) of $153.1 million compared to its forecast of $143.7 million.

In addition, the company recorded ~415,000 unique paying customers in FY21, compared to the prospectus forecast of ~405,000.

Airtasker said the strong performance “demonstrates the strength of the Airtasker model and its operating leverage at scale”, despite disruptions such as the 14-day lockdown in Melbourne and the start of the Sydney lockdown from 26 June.

Airtasker business is going global

On 24 May, Airtasker announced the acquisition of local services marketplace Zaarly in the United States.

The acquisition would bring on board more than 597,000 registered users and over 900 verified service providers to accelerate the company’s US growth plans.

The Airtasker share price rallied 12.96% to $1.22 on 25 May, when its shares returned from its Zaarly acquisition trading halt.

Today’s update advised that the integration of Zaarly and US expansion plans were “progressing well”.

In addition, the company said that its UK marketplace operations were “performing well off a small base”.

UK June quarter GMV was up 93% on the March quarter and up 232% compared to a year ago.

Could lockdowns impact the Airtasker share price?

The Airtasker share price has tumbled 12% in July, closing at a low of 94 cents on Tuesday.

According to today’s announcement, the Sydney, Melbourne and Adelaide lockdowns have witnessed a 12% decline in weekly GMV in July.

The company believes that as with previous lockdowns, a strong rebound in marketplace volumes is expected once restrictions ease in each city.

The post The Airtasker (ASX:ART) share price is up 5%. Here’s why appeared first on The Motley Fool Australia.

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• Airtasker (ASX:ART) share price storms 5% higher after smashing FY 21 guidance

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Company results season is about to start in a few days and that could see prices for certain ASX shares spike up or down.

Therefore it is wise to see if there are any stocks that might have big news coming up.

Medallion Financial managing director Michael Wayne this week picked out for his clients a trio of ASX shares to watch.

He told The Motley Fool these businesses are worth picking up for investors willing to put up with “a little pre-report risk”.

“We feel these 3 are a good chance of delivering and continuing the good momentum they’ve been displaying in recent months.”

Don’t let the decline in revenue fool you

Wayne is intrigued by debt buyer Credit Corp Group Limited (ASX: CCP) this reporting season.

“Management have shown themselves to be very adept at purchasing wisely, building solid debt ledgers over an extended period of time,” he said in a report to clients.

“We are optimistic that this careful approach, which served them well through the GFC, can drive growth into the future and we are supportive of a strong board which has worked closely with management to restore value for shareholders after the initial COVID-19 falls.”

Credit Corp shares closed Wednesday at $27.74, which is down almost 10% for the year.

The company revealed its half-year revenues declined. But Wayne suggested not overplaying this.

“While revenues fell by 2% to $188 million, the key for a business like Credit Corp is their profitability as it indicates how well they’re selecting and how efficiently they’re recovering the debt they purchase,” he said.

“In this instance, net profit after tax grew at a strong 10% to… $42.3 million against the prior corresponding half.”

The share price has dipped almost 6% in the past month and, according to Wayne, this presents an entry opportunity.

“With no alarming issues raised in the business update, a growing US presence and strong management track record, we see this week’s approximate $1.30 pull-back as an opportune time to consider Credit Corp.”

Small-cap ASX share with solid financials

Wayne reckons while scientific laboratory equipment provider XRF Scientific Limited (ASX: XRF) doesn’t have a huge market cap, it has a reliable history.

“We believe this to be a great business which exhibits solid financials over an extended period,” he said.

“XRF has delivered consistent growth in key metrics and after confirming a 47% increase in net profit to $2.4 million for the first half of FY21 in February and an impressive March quarter more recently, we are confident of continued growth being delivered in their upcoming full year results to be delivered in August.”

XRF is due to report its financials to the market on 24 August.

Its share price is up almost 47% for the year, to close Wednesday at 44 cents. It has cooled off in the past month though, dropping more than 6%.

Wayne said there’s a little icing on top for those willing to back the business.

“XRF also pays an approximate 2.9% fully franked dividend.”

‘Unregulated monopoly’ for this Aussie business

Audinate Group Ltd (ASX: AD8)’s flagship product Dante allows audio equipment to communicate with each other via computer networking cables.

It’s a business that Wayne has vouched for previously.

“They’re growing very, very quickly. The adoption rate… is about 17 times the nearest competitor,” he told The Motley Fool back in May.

“I think about 75% of new audio equipment and digital equipment incorporates the Audinate Dante protocol. And that should mean that they’re embedded into that industry for some time to come.”

The stock advisor still has the same conviction ahead of the August reporting season.

“At this stage the business is still building scale — but at this rapid rate of progression, it is conceivable in our view that the Dante product will emerge as an unregulated monopoly,” he said this week.

“This is particularly positive news with market data forecasting the networked audio space is expected to triple from 2020 to 2024.”

Audinate shares are up more than 14% for the year, closing Wednesday at $9.42. Its preliminary report is due 19 August.

The post 3 intriguing ASX shares to buy before reporting season appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that many brokers think could be buys
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• Here’s why the Audinate (ASX:AD8) share price is up 25% in a month

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The IRESS Ltd (ASX: IRE) share price is far and away the best performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

In morning trade, the financial technology company’s shares were up as much as 16% to $14.54.

The IRESS share price has dropped back a touch since then but currently remains 13% higher at $14.15.

Why is the IRESS share price rocketing higher?

Investors have been bidding the IRESS share price higher today after it revealed the receipt of a takeover approach from earlier this month.

According to the release, on 4 July EQT Fund Management made a confidential, unsolicited, non-binding and indicative proposal to acquire IRESS via a scheme of arrangement at a price of between $15.30 and $15.50 cash per share. This represents a 22.3% to 23.9% premium to the IRESS share price at yesterday’s close.

This is the second offer that EQT Fund Management has made, with IRESS rejecting a $14.80 per share proposal received on 18 June. The IRESS Board rejected that offer as it was not considered to be in the best interests of shareholders.

What about the latest offer?

IRESS revealed that following careful consideration, including obtaining advice from its financial and legal advisers, the IRESS Board unanimously concluded that the new proposal was conditional and did not represent compelling value for shareholders.

However, it did inform EQT Fund Management that it was prepared to provide it with access to limited non-public information. This is so EQT can develop a proposal that is capable of being recommended to shareholders. This information has now been shared with EQT after the two parties entered into a confidentiality and standstill agreement.

While discussions are continuing, management warned that there is no certainty that they will result in a revised proposal from EQT.

As a result, the IRESS Board recommends that shareholders take no action in relation to the proposal. In the meantime, the company will continue to keep shareholders and the market informed of developments.

The IRESS share price is now up 32% in 2021.

The post IRESS (ASX:IRE) share price rockets 16% on new takeover proposal appeared first on The Motley Fool Australia.

More reading

• 3 intriguing ASX shares to buy before reporting season
• Splitit (ASX: SPT) share price wobbles after business update
• Fortescue (ASX:FMG) share price rallies 3% to record high after quarterly results
• Is Netflix’s move into gaming a sign its best days are over?
• Macquarie (ASX:MQG) share price lower after Q1 and dividend update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Splitit Ltd (ASX: SPT) share price is seesawing in early trade today after a quarterly update from the Aussie payments group.

Splitit shares fell by 1% on open, before bouncing back to 51 cents — a gain of 3.03% on yesterday’s closing price. However, they then partially retreated and at the time of writing are changing hands for 50 cents — up 1.01%.

What’s with the Splitit share price today?

Investors weren’t too impressed with this morning’s update for the quarter ended 30 June 2021 (Q2 2021). That’s despite Splitit reporting merchant sales volume (MSV) of US$90.3 million, up 38% on Q2 2020 and 10% on last quarter.

Additionally, first-half MSV jumped 93% year-on-year to US$172 million with total merchants up 167% to 2,800.

The Aussie payments group reported a “significant reduction” in its cost of funds from July 2021 onwards. This was thanks to a US$150 million warehouse facility with Goldman Sachs.

The Splitit share price has been jittery on the back of this morning’s financial and operational update. That’s despite the record high quarterly MSV result for the group and a 66,000 increase in total shoppers to 566,000.

Splitit also re-confirmed that tabby, the leading Middle Eastern BNPL operator, and Pakistan-based Qisstpay, will integrate a white-label version of Splitit onto their platforms.

However, it wasn’t all good news from the buy now, pay later group this morning. Splitit CEO Brad Paterson said the quarterly results “need to be considered in the context of comparing against periods with spikes in growth during COVID and choppy macro conditions that created some headwinds”.

“We have seen delays in a number of merchant integrations due to many large merchants investing in and prioritising ecommerce replatforming initiatives,” he added.

Despite Mr Paterson having “never been more confident about the long-term outlook for the business”, the Splitit share price fell at the open before recovering.

Foolish takeaway

The Splitit share price trended lower in early trade today before bouncing back, and is currently in the green. Despite bumper growth numbers, the comparison is off a low base due to COVID impacts in FY 2020.

The Splitit share price is down about 60% year-to-date.

The post Splitit (ASX: SPT) share price wobbles after business update appeared first on The Motley Fool Australia.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price is racing higher on Thursday after the company released its June quarterly and full year FY21 update.

Shares in the iron ore major jumped 2.98% above yesterday’s closing price to a high of $26.58 in early morning trade. This topped its 8 January record high of $26.40.

The price has since eased back a little to be up 1.28% to $26.14 at the time of writing.

A record open for the Fortescue share price

It’s head above the clouds for the Fortescue share price after the company delivered record results across the board.

Fortescue revealed record iron ore shipments of 49.3 million tonnes for the quarter. This is a 4% increase on the prior corresponding period (pcp).

Shipments for the full year FY21 came in at 182.2 million tonnes, or 2% higher compared to a year ago.

Pleasingly, FY21 shipments have topped prior guidance of 182 million tonnes.

Sky high iron ore prices have not only propped up the Fortescue share price in the past 12 months but also translated to record average revenue.

According to the announcement, the company achieved US$168/dry metric tonne (dmt) for the quarter and US$135/dmt for the full year FY21.

From a cost perspective, C1 cost for the fourth quarter came in at US$15.23/wet metric tonne and US$13.93/wmt for FY21, in line with guidance.

The strong results produced a cash-on-hand position of US$6.9 billion and net cash of US$2.7 billion at 30 June 2021, compared to a net debt of US$1.0 billion at 31 March 2021.

Iron Bridge project update

Brokers have previously flagged the blowout costs from the Iron Bridge project as a potential drag on the Fortescue share price.

The quarterly update cited no changes in costs (US$2.5 billion to US$2.7 billion) with first production scheduled for December 2020 and a ramp-up period of 12 to 18 months.

FY22 guidance

Looking ahead, Fortescue is forecasting iron ore shipments of 180 to 185 million tonnes of iron ore at a C1 cost between US$15.00 to US$15.50/wmt.

FY22 capital expenditure is expected to land between US$2.8 billion to US$3.2 billion. This is inclusive of hub development, operational development, exploration and major projects (Iron Bridge).

Keep an eye on the Fortescue share price

While the quarterly update didn’t specify Fortescue’s financials, record iron ore shipments, record average revenue and costs in line with guidance all highlight what a strong year it’s been for the iron ore miner.

According to Fortescue’s half year results, the company’s dividend policy is to pay out 50% to 80% of full year net profit after tax, targeting the top end of the range.

Investors should keep an eye on the Fortescue share price when the miner reports its full year results on 30 August.

The post Fortescue (ASX:FMG) share price rallies 3% to record high after quarterly results appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Netflix (NASDAQ: NFLX) gave investors a lot to chew on in its second-quarter earnings report. The company beat its own guidance for subscriber additions, but it disappointed with lower-than-expected guidance for the third quarter. Management is guiding for 3.5 million paid subscriber additions in the current period, falling short of the 5.6 million analyst consensus. To top things off, Netflix also confirmed its plans to expand into video games.

The combination of weak guidance with the news of its entry into a new entertainment medium makes it seem the company is getting desperate for growth. But Netflix still has a long runway to expand, and this video game initiative makes sense for a few reasons.

Growth is slowing

There’s no question that as Netflix becomes a larger business, its year-over-year subscriber growth will gradually slow. The company now serves over 209 million paid subscribers,. Before the pandemic, Netflix’s year-over-year subscriber growth was gradually decelerating, falling from almost 26% at the end of 2018 to 20% the following year.

Still, the long-term opportunity in streaming is massive. Despite a decade of growth, all streaming services still have less share of TV time than traditional linear TV. The latter has a 63% share of total U.S. TV time, according to Nielsen, while all streaming platforms have a 27% share. Netflix’s share of TV time is even smaller at 7%.

As the company notes in its earnings report, “We are still very much in the early days of the transition from linear to on-demand consumption of entertainment.” And if Netflix can hit its third-quarter subscriber guidance (3.5 million net additions), it will have added enough subscribers over the last 24 months to maintain its pre-pandemic growth rate.

Some investors might still wonder about increasing competition and the impact it could have on Netflix’s ability to add new subscribers, but management believes if it can offer more content, growth should continue like it has for two decades.

And that brings us to gaming.

The reason for games

In that context, gaming doesn’t appear to be any more of a response to competition or slowing growth than Netflix’s move into original content in 2012. Netflix says it is early in its expansion into games, but they will be included at no extra cost to members and featured primarily on mobile devices. It’s basically another content category like animation and unscripted TV.

The company could emerge as a top developer on mobile platforms. It’s going to focus on making games that don’t require in-app purchases and ads, which run the risk of disrupting the gaming experience. In this way, Netflix could carve itself a unique position as a user-friendly platform that leads to increasing screen time among its members.

It doesn’t need to worry about charging for these games, because higher screen time and engagement should eventually pay off in the form of higher subscription revenue per membership. In the last quarter, Netflix saw its average revenue per membership increase 8%. This follows a 5% increase in the previous quarter.

The entry into games also signals Netflix’s improving profitability. It expects to reach free-cash-flow breakeven in 2021, and it no longer has a need to raise external financing to fund operations.

With its operating margin expected to reach 20% this year, the company can afford to invest in new opportunities without shortchanging itself on spending for original movies and series.

Looking at the big picture, this push into gaming could be the first step for Netflix to graduate from a pure-play streaming stock to a more broad-based entertainment company. Expanding its umbrella of opportunities should spell a wider competitive moat and more returns for investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Netflix’s move into gaming a sign its best days are over? appeared first on The Motley Fool Australia.

More reading

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• 5 US shares investors will be watching on earnings this week

John Ballard has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Macquarie Group Ltd (ASX: MQG) share price is under a bit of pressure on Thursday.

In morning trade, the investment bank’s shares are down 0.5% to $155.83.

Why is the Macquarie share price in the red?

The Macquarie share price is trading lower today after the company released a first quarter update at its annual general meeting.

According to the release, trading conditions have significantly improved during the first quarter of FY 2022. This has led to Macquarie’s operating businesses delivering a net profit that was significantly up on the first quarter of the prior corresponding period.

The release explains that Macquarie’s annuity-style businesses, Macquarie Asset Management (MAM) and Banking and Financial Services (BFS), posted a combined first quarter net profit contribution slightly up on the same period last year.

This was primarily due to higher average volumes and lower provisions in BFS. This was partially offset by reduced contribution from MAM, where the absence of the gain on sale of the rail operating lease business was partially offset by the Macquarie Infrastructure Corporation (MIC) disposition fee.

Macquarie’s markets-facing businesses (Commodities and Global Markets (CGM) and Macquarie Capital) delivered a combined first quarter net profit contribution significantly up year on year.

Management advised that this was primarily due to the sale of the UK commercial and industrial smart meter portfolio which was partially offset by the timing of income recognition on storage and transport contracts in CGM. Macquarie Capital recorded significantly higher investment–related income.

Strong capital position

Macquarie ended the period with a financial position that continues to comfortably exceed the Australian Prudential Regulation Authority’s (APRA) Basel III regulatory requirements.

Its group capital surplus stood at $7.4 billion at the end of June. While this is down from $8.8 billion at the end of March, it equates to a strong CET1 ratio of 12.1%.

Dividends under pressure

The main drag on the Macquarie share price today appears to be comments around its dividend plans.

The release explains that the company intends to reduce its annual dividend payout policy range to 50% to 70%. This is to allow additional flexibility to support business growth and compares to its previous target range of 60% to 80%.

Outlook

No real guidance was given with today’s update. However, management spoke positively about its prospects over the medium term.

It commented: “Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; a strong and conservative balance sheet; and a proven risk management framework and culture.”

In the short term, it warned that its outlook could be influenced by a range of factors including COVID-19, potential tax or regulatory changes, and foreign exchange impacts.

The post Macquarie (ASX:MQG) share price lower after Q1 and dividend update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australian Pharmaceutical Industries Ltd (ASX: API) share price is in the red after it rejected Wesfarmers Ltd‘s (ASX: WES) takeover offer.

API announced this morning its board has rejected the offer, saying it’s not compelling or in its shareholders’ best interests.

Right now, the API share price is $1.40, 0.35% lower than its previous closing price.

Let’s take a closer look at the news out of API this morning.

Wesfarmers’ offer rejected

The API share price is down today after the company rejected Wesfarmers’ takeover offer of $1.38 cash per share.

The pharmaceutical, health, and beauty-focused company said Wesfarmers’ offer was at an 18.7% premium to API’s 3-month volume weighted average share price. It said that figure is “significantly below the Australian market average for transactions of this nature”.

Additionally, API’s board said the offer was opportunistic given the impact COVID-19 has had on API’s profits.

It also said it failed to take into account the strategic value of Priceline.

According to API, its expecting “substantial” growth in Priceline’s earnings as COVID-19 restrictions lessen and the impact of closing 9 loss-making stores take effect.

It also said Wesfarmers’ offer failed to take into account API’s investment into 39 Clear Skincare clinics and the savings expected from the development of the Marsden Park Distribution Centre.

Finally, it said it expects its pharmaceutical distribution business to get more funding from the 4 years remaining on API’s 7th Community Pharmacy Agreement, as well as its arrangement with Pfizer (which doesn’t include the COVID-19 vaccine).

The Wesfarmers share price is falling alongside that of API this morning.

Currently, shares in Wesfarmers are going for $61.25, 0.49% lower than their previous close.

API share price snapshot

API has been performing well on the ASX lately.

Right now, shares in API are trading for 11.9% more than they were at the start of the year. They’ve also gained 29% since this time last year.

The company has a market capitalisation of around $694 million, with approximately 492 million shares outstanding.

The post API share price (ASX:API) falls after rejecting Wesfarmers takeover offer appeared first on The Motley Fool Australia.

More reading

• Wesfarmers (ASX:WES) share price falls after API rejects takeover offer
• Own Wesfarmers (ASX:WES) shares? Here’s what to look for during reporting season
• 2 ASX shares to hold onto for the next 5 years
• Here’s why the Wesfarmers (ASX:WES) share price is up 7% in a month
• ASX 200 Weekly Wrap: Just like that… ASX back to record highs

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price is climbing in early trade today. This comes after The Australian reported the oil giant was nearing a deal with BHP Group Ltd (ASX: BHP) to acquire its petroleum operations.

At the time of writing, Woodside shares are swapping hands for $22.30, a gain of 1.29%.

The latest news follows reports last week BHP was looking to exit the oil and gas business.

Let’s take a closer look.

Woodside wants some black gold

According to the report, Woodside will be looking to acquire the global portfolio of assets BHP holds in oil and gas. Previously, it was believed Woodside was only looking to acquire the Australian petrol assets of the mining giant.

The deal could be announced in 3 weeks, according to experts cited by The Australian. Both companies will be showcasing their end-of-year results on 17 August – the same time as the expected announcement.

Woodside and BHP are already joint-venture partners in a number of Australian oil and gas rigs, including a few in Western Australia.

The Australian, citing market analysts, says BHP’s entire oil and gas portfolio is worth about $20.4 billion. Given the current Woodside share price, that’s almost the equivalent of the entire company’s market capitalisation ($21.2 billion).

It is believed Woodside will pay for the prized assets using scrips that will be distributed to BHP shareholders.

In its most recent half-year results, BHP’s petroleum segment generated US $1.6 billion in revenue – down 34% on the prior corresponding period (pcp). Petroleum’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) was US $789 million – down 50% on the pcp.

In Woodside’s most recent full-year report, operating revenue was US$3.6 billion and underlying EBITDA was $1.9 billion. Both figures are down on the pcp.

Woodside share price snapshot

Over the past 12 months, the Woodside share price has increased 10%. The S&P/ASX 200 Index (ASX: XJO) has increased about 23% over the same time.

Only yesterday, the Woodside share price was on notice. This was a result of rumours the company was about to engage in mass job-cuts.

The post Woodside (ASX:WPL) share price rises as rumours swirl over BHP deal appeared first on The Motley Fool Australia.

More reading

• BHP (ASX:BHP) share price on watch amid news all petroleum assets to go
• 5 things to watch on the ASX 200 on Thursday
• BHP (ASX:BHP) share price slides as $9b class action resurfaces
• Woodside (ASX:WPL) share price slipping amid rumoured job cuts
• BHP (ASX:BHP) share price on watch after announcing Ring of Fire acquisition

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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