Woodside Petroleum is looking at a solid rebound in first half earnings from 2020’s very weak level after higher prices of LNG boosted revenue nearly 30% to just under $US2.5 billion in the six months to June.
The company is currently seeking to sell stakes in its huge Scarborough gas field off the coast of Western Australia and an offshore oil project in Senegal after delivering a larger-than-forecast rise in revenue for the June quarter and half year.
The June quarter sales revenue of $US1.285 billion beat most analysts’ forecasts and was up a sharp 67% on the depressed $US768 million revenue for the June, 2020 quarter.
For the half year revenue totalled $US2.493 billion compared with $US1.917 billion for the first half of 2020.
The rebound and absence of write downs means Woodside is heading for a solid half year result when released on August 18.
The company reported a statutory loss of $US4.067 billion for the first half of 2020 after an underlying net after tax profit of just $US303 million, and looks on track to easily surpass that low figure.
Production volumes declined to 22.7 million barrels of oil-equivalent (MMBOE) for the quarter was slightly lower expectations. For the half production fell to 46.332 MMBOE from just over 51 million in the first half of 2020.
After last year’s coronavirus lockdowns sent liquefied natural gas (LNG) plunging below $US2 a million British thermal units (Btus), strengthening demand across northern Asia lifted prices back above $US12, the highest for this time of the year since 2013.
Energy-challenged China, Japan and South Korea led the way as a colder than expected winter boosted power consumption and left parts of China in particular short of electricity.
Woodside’s average realised price for LNG jumped 15% to $US7.40 per million Btus in the three months to June 30, the company said in its June quarterly report on Thursday.
Woodside said its average oil prices for the period were “above-market” at $US75 a barrel.
Acting CEO Meg O’Neill said in Thursday’s statement that higher realised prices in the June quarter helped underpin a 15% rise in sales revenue compared with the first three months of the year.
“Revenue from oil sales during the period was higher than the first quarter supported by an above-market average realised price of $75/barrel, while revenue from LNG sales climbed 14%.
“Lower oil production due to scheduled maintenance activities and adverse weather impacts was partly offset by a strong quarterly performance at Pluto, which achieved 97% reliability.
“Work on our Sangomar Field Development Phase 1 offshore Senegal continued on schedule during the quarter and the project is now nearly one-third complete. In July, the first of two drilling vessels arrived in Senegal and the drilling campaign commenced for the project’s 23 wells,” she added.
Ms O’Neill also revealed in her commentary that Woodside had formally begun sales processes for its stake in the $15 billion Scarborough offshore gas field joint venture with BHP, which would include a stake of up to 49% in the associated Pluto gas plant expansion project.
Woodside is targeting a final investment decision this year.
“Solid progress has been made towards our targeted final investment decision on Scarborough and Pluto Train 2 in the second half of this year,” Ms O’Neill said.
However, she also flagged potential cost increases in the project following “extensive engagement” with contractors in recent months.
She said the company was also looking at options for the Senegal project now that Woodside has completed the acquisition of FAR’s interest in the Rufisque Offshore, Sangomar Offshore and Sangomar Deep Offshore (RSSD) joint venture and launched a sell-down process.
Woodside shares fell 1.3% to $22.94.
