Scarborough is progressing and set for a final investment decision in 2020. A tolling fee has been agreed and interest in the fields are now aligned for both Woodside Petroleum and BHP Group ((BHP)).
Gas will be processed through the Pluto train 1 and the train 2 expansion.
Woodside’s ability to manage capital investment over returns to shareholders will be a key driver of the share price in the medium term, Macquarie suggests.
The broker upgrades to Outperform from Neutral, noting the payment of the dividend is now critical to a positive view. A 73% pay-out ratio is assumed for 2020. Target is reduced to $33 from $35.
Sector: Energy.
Target price is $33.00.Current Price is $27.40. Difference: $5.60 – (brackets indicate current price is over target). If WPL meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
