Save for later Print Download Share LinkedIn Twitter A large consolidation movement is expected to take place among independents as the energy transition prompts companies to achieve size and scale, both in terms of balance sheet and production. The idea is to improve financial strength and portfolio resilience in a market where fossil fuel demand will slow over time. Australia's Woodside and Santos are ticking these boxes with their acquisitions of BHP’s petroleum portfolio and Oil Search, respectively. After the deals close, Woodside and Santos would rank among the 20 largest oil and gas publicly traded companies in the world with a market capitalization of US$30 billion and US$21 billion, respectively. Woodside expects to double its production to more than 500,000 barrels of oil equivalent per day. This will boost revenues to more than US$8 billion while its operating cash flow will cross the US$3 billion threshold. In terms of liability, BHP's petroleum business comes without debt. As a result, Woodside’s gearing will drop to 12% — lower than its target range of 15%-35%. Santos' production is expected to reach approximately 320,000 boe/d with more than US$5.5 billion of liquidity to self-fund development projects. Santos also expects the Oil Search deal to unlock pretax synergies of US$90 million-US$115 million per year.