Wheatstone LNG Drives Woodside To Stronger Half

By Glenn Dyer | More Articles by Glenn Dyer

Woodside Petroleum has lifted interim dividend 8% to 53 cents a share after a solid first half effort reporting higher sales, profit and forecasting a lift in production for the year to December.

The company will pay an interim of 53 US cents a share, up from 49 cents a year (and for the final for 2017).

The shares eased 1.8% yesterday to $35.61 around 1 pm on an easing in world oil prices.

Woodside reported a half-year net profit of $US541 million ($A747 million), which it said was driven by higher production levels at its Pluto LNG and Wheatstone LNG train 1 projects in Western Australia.

Its lifted revenues 25% in the first half of 2018, compared to the previous period, to $US1.54 billion as world oil and LNG prices rose strongly in the half.

Woodside also slightly lifted its 2018 production guidance, from 85 to 90 million barrels of oil equivalent to between 87 and 91 MMboe.

The company says it is focused on hitting a targeted annual production rate of 100 MMboe in 2020.

Woodside chief executive Peter Coleman said in a statement the company is now preparing to enter a major growth and construction phase at its West Australian gas developments.

"During the first half we delivered positive free cash flow while acquiring additional equity in the Scarborough gas resource and investing to deliver the near-term growth which will contribute to targeted production of approximately 100 MMboe in 2020.

"First half NPAT was impacted by the timing of finance costs and exploration expense, and taxes. The increased interim dividend of 53 US cents per share reflects the strong operating cash flow for the half.

"Our base business has performed strongly, with Pluto LNG exceeding 99% reliability. Wheatstone LNG Train 1 has achieved above nameplate production rates and Train 2 is ramping up as planned. These results underpin an increase in the 2018 annual production guidance to a range of 87 to 91 MMboe. "Our Greater Western Flank 2 and Greater Enfield projects have progressed toward anticipated start ups in early and mid-2019 respectively.

"In Senegal, we received tender responses supporting the SNE Field Development-Phase 1 and are aiming to enter the development’s front-end engineering and design phase in the second half of this year.

"During the first half we initiated contractor engagement for the Scarborough FEED phase, targeted to begin in late 2018. The proposed development of Scarborough, with the gas to be processed at our proposed Pluto LNG Train 2, would take advantage of the expected global LNG supply gap from the early 2020s.

"Subsequent to the half, alignment was reached between the North West Shelf participants on non-binding key commercial terms and pricing for processing third-party gas through NWS infrastructure. "This is a key step towards us realising our vision for a Burrup Hub, which would unlock the future value of the NWS. We expect to reach a preliminary tolling agreement between the NWS Project participants and Browse Joint Venture in Q3 2018.

"Investment expenditure for 2018 is expected to be between $2,000 and $2,050 million, which includes the acquisition of an increased interest in Scarborough in the first half. Production costs per barrel of oil equivalent across all operating assets for 2018 are expected to be between $5.50 and $5.80," he said.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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