The best test of whether a merger has a reasonable chance of success is whether the two sides of the deal have aligned values, something you can see in Santos + Oil Search but are yet to see in Woodside + BHPP.
Formal approvals from Santos and Oil Search shareholders are the first of the remaining hurdles for their companies to create a regional oil and gas leader, along with a tick from the government of Papua New Guinea.
Rejection at either level remains a possibility but the stock market seems to be signalling that there is a close alignment of the two companies as shown in the near-synchronised share-price moves over the past month. Santos down 5.02%. Oil Search down 5.09%.
The fact that a test of value alignment has to go to the second decimal point demonstrates the high level of comfort with the deal among investors who are keen to be part of a freshly-created, globally-significant oil company specializing in LNG at a time when gas prices have rarely (if ever) been higher.
What's happening in the international gas market ought to also be driving Woodside + BHPP, but that doesn't appear to be the case in what has become an example of poorly-aligned values.
Whereas Santos and Oil Search have been moving in harmony on the stock market over the past month Woodside and BHP have not and that is almost certainly starting to cause uncertainty in the minds of big BHP shareholders.
Over the past month Woodside shares have declined by 12%, more than twice the rate of Santos or Oil Search which are in the same business and exposed to the same commodity-price moves.
BHP, however, is the real worry when it comes to winning shareholder approval because it is down 22% over the past month, a fall which has a lot more to do with the price of iron ore than oil.
Odd as it might seem but the fall in the price of iron ore from US$160 a tonne on August 17, the day the merger of Woodside and BHPP was announced to last sales at $130/t has made BHP shareholders nervous about the loss of their company's petroleum business, especially as the iron ore price seems poised to continue falling.
Environmentally conscious BHP shareholders might be pleased to see the exit from fossil fuels such as coal and oil but they will also be wondering what they're left with because the joke about a company "shrinking to greatness" is not a joke at BHP.
Iron ore since mid-May has fallen by $100/t (44%), a drop which will have a significant effect on BHP's profits in the current financial year.
But, of equal importance when it comes to offloading the company's oil and gas business into Woodside the oil price since mid-May has risen by $20 a barrel.
The terms of the Woodside + BHP deal mean that BHP shareholders will be issued with Woodside shares and can sell those if they don't want to be in the fossil fuel business, which is one reason for believing that the merger will proceed.
There is, however, disquiet among major institutions which hold BHP shares because without oil and gas their company is no longer the diversified resources business it once was, almost totally dependent on earnings from iron ore and copper with the promise of potash profits sometime in the next decade (maybe).
What seems to be happening at BHP is an example of what follows when environmental theory gets a grip on the management of a major company which has chosen to turn its back on business units which remain handsomely profitable in order to please some people who prefer their investments to be environmentally neutral.
Selling coal today and getting rid of oil tomorrow might reshape BHP but it remains a company exposed to resources and some of those, including iron ore, will eventually come under similar environmental pressure as oil and gas.
That's especially true when Scope 3 emissions regulations are enforced and iron ore producers are forced to account for the pollution caused by steel making in another country.
Just what exactly is BHP gaining today in quitting oil, gas and coal if there's another wave of demands to cut exposure to politically incorrect commodities, including those used to make essential material such as steel - which is already under attack in China.
The first warning bell about BHP possibly making a grave mistake in quitting oil and gas was sounded last month when the ratings agency S&P said the company might become too dependent on iron ore at a time when the iron ore price is falling.
The next warning bell will almost certainly be sounded by big BHP shareholders who follow the same line of questioning as S&P in asking how their company will continue to pay generous dividends if it quits a commodity with a rising price and keeps a commodity with a falling price.
Those latest stock market moves (BHP down 22% and Woodside down 12%) are just the sort of red flag which might see the Woodside + BHPP merger abandoned, or significantly restructured.
