The downturn in the global prices of oil and associated energy products such as LNG and condensates has finally caught up with Woodside Petroleum (WPL), as the company’s June quarter and half year report revealed yesterday.
The company said yesterday in the report that LNG prices finally fell after global oil prices fell a year ago, resulting in a 46.5% fall in second quarter revenues.
June quarter sales were $US898 million, down from $US1.68 billion in the same period a year earlier. A 14.5% drop in production contributed to the drop in revenues as the Pluto LNG venture offshore Western Australia was shut for maintenance work and the North West Shelf venture was hit by an unplanned shutdown.
The second quarter slump saw revenue for the first half plunge 28%, or $US994 million to $US2.556 billion from more than $US3.5 billion in the first half of 2014.
Output was 20.1 million barrels of oil equivalent in the June quarter, down from 23.5 million in the same three month period in 2014. Production dropped 7.8% from the March quarter.
Woodside said LNG revenues for the quarter slid 36% from the March quarter because of the four month lag between LNG prices and the Japanese crude import price on which LNG long-term contracts are based.
As a result, LNG revenues from the $15 billion Pluto venture more than halved to $US346 million from $US712 million in the first quarter of 2015.
WPL 1Y – Woodside’s 2Q revenue drops 46.5%
The company pointed out that the fall in total revenues would have been sharper were it not for added oil production Woodside secured as a result of its acquisition of Apache Corporation’s stake in the Balnaves oil field off Western Australia, which contributed $US40.8 million of revenue in the June quarter.
Completing the maintenance work at Pluto 10 days ahead of plan also reduced the impact of the shutdown (it enabled LNG to be produced than expected).
Woodside kept its full year production target unchanged at between 86 million and 94 million boe, including the assets acquired from Apache.
The fall in global energy prices hasn’t changed the timing of a decision on the Browse floating LNG venture off WA. Woodside yesterday said that it was still on track for a final investment decision in the second half of 2016.
And Woodside pointed out that it would receive a benefit on petroleum resource rent tax of between $US70 million and $US110 million for the first half, to be reported in its interim earnings statement on August 19.
Woodside shares fell 1.1% to $34.57.
