Woodside Petroleum has entered into a binding sale and purchase agreement to acquire half of the assets of BHP Billiton’s Scarborough assets in Carnarvon Basin situated offshore Western Australia.

The estimated price of the acquisition is $400m out of which Woodside will pay $250m to BHP after completing the transaction.

The remaining $150m will be a contingent payment, which will be paid after a positive final investment decision to develop the Scarborough field is taken.

The Scarborough area assets will include gas fields in Scarborough, Jupiter and Thebe, where an estimated amount of 8.7 trillion cubic feet of gas resources are present at 2C confidence level.

After the acquisition, Woodside’s net share of the resources is estimated to be 2.6 trillion cubic feet of gas.

The acquisition includes 25% interest in WA-1-R and 50% stake in WA-62-R, which together contain the Scarborough gas field.  It will also acquire 50% interest in WA-61-R and WA-63-R which contain the Jupiter and Thebe gas fields.

Out of the gas fields acquired, Woodside will operate WA-61-R, WA-62-R and WA-63-R, while ExxonMobil will operate WA-1-R.

Woodside CEO Peter Coleman noted that by adding Carnarvon basin volumes to the Australian portfolio, can add to Woodside’s growth strategy and leverage its deep water and LNG capabilities.

He said: “We look forward to working with ExxonMobil and BHP Billiton following completion of the transaction to progress commercialisation of these world-class resources.”

The transaction is expected to be completed by this year end after receiving customary regulatory approval and pre-emption rights.

According to Woodside, the average cost of $0.15/metric cubic feet (mcf) and the transaction is being fully funded with the company’s existing $2bn liquidity buffer.