Santos shares spike, Woodside slips amid merger talks

The news: Woodside and Santos shares have diverged after the oil and gas giants confirmed they were discussing a potential merger. The talks are in early stages and there is no certainty of a deal.

The numbers: Shares in Woodside — the larger company with a market cap of $56.9 billion — fell 1.9% in early trading to $29.41. Santos, valued at $22.2 billion, was 6.3% higher at $7.26 by 11am AEDT.

The context: The two energy behemoths confirmed they were in merger talks on Thursday following speculative media reports. In recent years there has been significant consolidation in the oil and gas sector, where scale is especially crucial to profitability. In 2021 Santos merged with Oil Search, and more recently Chevron bought Carribean oil play Hess for USD60 billion ($90.9 billion), and Exxon merged with Pioneer Natural Resources in October in a deal worth $US64.5 billion.