Oil and gas giant Woodside Petroleum (WPL) has reported a drop in first-quarter revenue, thanks to lower production caused by bad weather which also contributed to a build up in inventories as a result of the disruption to its LNG sales.
Total sales revenue fell 11.2% to $US895 million ($A1.2 billion) in the three months to March 31, from $US1.01 billion in the December quarter of 2016. The March quarter was also down 8.8% from the 2016 March quarter’s $US982.4.
The company produced 21.4 million barrels of oil equivalent in the first quarter, down from 23.8 million in the previous quarter and 23.7 million in the first quarter in 2016.
The group said there had been 21 days in the quarter that were weather-impacted, above the long-run average of 13 days. Among those was a “once in 50-year” rainfall event at its LNG production facilities.
“Operational performance remains strong with the North West Shelf gas facilities and the Nganhurra FPSO achieving 98 per cent reliability during the quarter,” CEO Peter Coleman said in yesterday’s quarterly report.
“Pluto production was approximately 5 per cent lower than expected; a positive outcome given the significant weather impacts experienced during the quarter,” Woodside said in the report to the ASX.
Rio Tinto and Fortescue Metals Group have both reported lower iron ore shipments because of the bad weather in the Pilbara in the quarter which also disrupted output from their mines, BHP Billiton can be expected to report a similar impact when it releases its third quarter production and sales report next week.
Woodside meanwhile says it as steppe dup its drilling program in Myanmar this year and may also add extra wells in its African exploration venture in Senegal as it maintains its a preference to find new resources rater than buy existing assets, as it has been doing in the past three years.
As a result, three exploration wells will now be drilled off the coast of Myanmar this year instead of two, bringing the total schedule to five firm wells, with potentially another two to be added depending on well results.
And in Senegal, Woodside is talking with its partners on two further exploration wells that may be drilled towards the year-end, according to chief executive Peter Coleman.
Woodside also revealed tat it had successfully struck new midterm LNG sales and purchase agreements for up to 16 cargoes for delivery between 2017 and 2019.”
Woodside has an investor day next month, when it will provide a further update on its long-term growth plans. Woodside shares eased 1.2% to $32.32.
