Higher gas prices along with higher volumes of oil (and higher oil prices) sold helped to offset a lower level of shipments for Woodside Petroleum (WPL) in the June quarter and for the first half of the year.
The market liked the news and the shares rose 0.6% to $41.87 by the close yesterday.
Woodside told the ASX yesterday in its June quarter production and exploration report that sales for the three months rose 24.8% to $US1.67 billion as volumes sold rose 6.4% to 21.5 million barrels of oil equivalent. Production in the quarter rose 17.5% to 23.5 million barrels of oil equivalent.
The company said production volumes benefited from higher volumes of liquified natural gas produced at the Pluto field off the northwest coast of WA, although volumes were affected due to the timing of shipments.
Higher LNG prices received, along with higher sales of oil helped to offset the lower volumes of LNG and condensate sales, Woodside said.
In the March quarter revenue rose 15.9% to $US1.67 billion on sales of 23.2 million barrels of oil equivalent which was a rise of 6.9% year on year. Production in the March quarter rose by 5% to 23 million barrels of oil equivalent.
First half revenue jumped 13% to $US3.354 billion from $US2.790 billion and seems to be heading towards topping the $US6.5 billion mark by the end of the year.
Production totalled 45.4 million barrels of oil equivalent int he six months, up a touch from the previous half year.
Woodside also raised its output target slightly for 2014. The company says it now aims to produce between 89 and 94 million barrels of oil equivalent (mmboe) this year, up from an earlier target of 86-93 mmboe.
WPL 1Y – Woodside solid, lifts 2014 production targets
But the market is now starting to focus on Woodside’s next big move. It has walked from trying to buy into Israel’s massive Leviathan field and opted to spend $2.9 billion buying back its own shares from Royal Dutch Shell.
The result will raise the prospect that by early 2015 the company might be in a position to reward retail shareholders who have missed out from the buyback of part of Shell’s holding. That might come earlier though with a big interim dividend promised.
The buyback needs shareholder approval at a meeting on August 1. Woodside said that provided that is approved, it would pay out 80% of underlying profit in its interim dividend, in line with the payout ratio announced a year ago.
Woodside recently announced two deals to buy US LNG to help it supply Asian customers and earlier this month announced the purchase of exploration stakes in Tanzania and in deep water off Morocco.
Woodside warned yesterday that the interim result would include a loss of $US20 million to $US40 million on the sale of oil and gas properties and exploration assets in the six months to June.
The company said it forecast an Australian petroleum resources rent tax of US80 million-$US100 million, and depreciation and
amortisation on its oil and gas properties for the six months of $US680 million-$US720 million. It didn’t reveal any profit figures.
The interim result will be released on August 20, after that special meeting on August 1.
