The collapse in the world price of oil hasn’t had much of an impact on Woodside Petroleum.
Oil prices are down from more than $US147 a barrel in July to around $US73-$US74 a barrel yesterday, with the Australian dollar falling from around 98 USc to around the 67-68 USc in the same time.
Oil fell to $US69 a barrel in New York overnight Thursday.
Until late last month, world oil prices were above those of a year ago, but for the past fortnight or so they have been hitting a series of 13 month lows, meaning that prices are now below those of October 2007.
Should this trend continue then Woodside faces the prospect of selling prices in US dollars producing less income in this quarter than a year ago
But the Woodside share price has buckled from just over the $A70 level in May to the $A37 level yesterday. That’s a fall of roughly 47%, against a drop in oil prices of close to 50%.
The Australian dollar price of oil at $US147 a barrel was $A150; the Australian dollar price of oil at $US73 a barrel is $A108, so there will be a noticeable impact, even though the Australian dollar price of oil is only down 28% against the 47% drop in the actual US dollar price.
That will make returns this year the lowest of the four quarters in 2008, but they should exceed last year when the value of the Australian dollar was above 80 USc.
In fact Australian dollar income could be a dollar or three above the average price for the December quarter of last year.
But so fat this year, the high oil price and the rapidly sinking dollar last quarter, has produced a near bonanza for Woodside.
Revenue climbed 84% to $1.774 billion during the three months to September 30, underpinned by higher commodity prices and increased sales.
Sales during the third quarter were 26% higher at 21.6 million barrels of oil equivalent (mmboe), up on the previous corresponding quarter’s figure of 17.1 mmboe, thanks mostly to a strong performance from the Enfield and Stybarrow projects in Western Australia and new oil field start-ups at Vincent in WA, and Neptune in the United States.
Output during the nine months to September 30 was 58.2 mmboe.
Meanwhile Queensland coal exporter, Macarthur Coal is looking at a substantially improved December half outcome, compared to what happened in the same period of 2007.
The company is the supplier of more than a third of the world’s pulverised coal and it told the ASX yesterday that it was expecting a profit of up to $160 million in the half year to the end of December 2008.
Macarthur reported net profit of $13.5 million in the previous corresponding half.
"The company’s premium low volatile PCI product remains in strong demand from global steel mills as its use reduces the cost of steel production," Macarthur chief executive Nicole Hollows said in a statement.
The company’s pulverised coal is used in the production of steel and some of the world’s majors fought over the company earlier this year at prices up to $A20 a tonne (it seems so long ago!).
ArcelorMittal the world’s biggest producer, Posco the world number four from South Korea and a major Chinese buyer Citic Resources, snatched control of the company with individual stakes that add to around 60% or a bit more.
But none of the trio controls the company outright.
Macarthur operates the Coppabella and Moorvale mines in Queensland’s Bowen Basin.
It said the improved half year profit forecast was due primarily to significantly increased coal prices.
The company said the forecast was dependent on achieving its budgeted shipping schedule and no change in the valuation of financial derivatives from June 30, 2008.
"We are forecasting a greater than ten-fold increase in first half profit, year on year," Ms Hollows said.
Macarthur has a full year export target of four million tonnes of PCI and one million tonnes of thermal coal, which is used in power stations.
The coal miner said sales volumes were progressively improving as the Coppabella mine recovered to full operating capacity after flooding in the Bowen Basin earlier this year.
"Importantly, given the current situation in financial markets, Macarthur Coal is in a strong financial position in relation to the funding for future growth," Ms Hollows said.
MCC shares ended down 13.7% at $5.90, a loss of 94c on the day. The trio of big holders are facing big losses.
