Despite Woodside’s first shipment of LNG from the Wheatstone project and record production at the Pluto facility the oil and gas group failed to lift production in 2017.
Production of 21.9 million barrels of oil equivalent for the December quarter was down almost 8% on the same period a year ago, despite the start-up in October of the huge Wheatstone project.
Woodside’s guidance that output this year should increase to between 85 million and 90 million barrels of oil equivalent (Mmboe) from 84.4 million last year was seen as less than expected by some investors.
Operating revenues for the year fell 4% from 2016, dropping from $US4.075 billion in 2016 to $US3.9081 billion in 2017.
While sales revenues jumped 7% quarter on quarter, from $US914 million in September to $US939 million, it was a 7% drop compared with the previous corresponding 4th quarter of 2016.
Woodside chief executive Peter Coleman said the drop was caused by a change in its share of domestic gas for the North West Shelf.
Mr Coleman told Fairfax Media the equity amount of gas received from the project shifted from half to only one sixth of gas, impacting its overall production levels.
Wheatstone’s first LNG production facility or train started production in October, with the first cargo delivered to Japanese buyers in November.
The first LNG shipment from Wheatstone Train 2 is forecast in the second quarter of 2018, with domestic gas production due to start in the second half of 2018.
The company’s Pluto field also had higher production rates, reaching a fourth quarter record.
But while revenue in the 4h quarter was soft and weak for 2017 as a whole, Woodside is looking a major lift in the current first quarter of 2018
An extremely strong oil price is forecast to play a major role in a positive performance for the first quarter of 2018 with the Brent Crude price is hovering around $US70 a barrel, and up sharply from a year ago.
"We anticipate that the stronger oil prices experienced in the fourth quarter will flow through to higher realised LNG prices in the first quarter of 2018," Mr Coleman said. “Looking ahead to 2018, we can expect a significant increase in annual LNG production and we anticipate we will be cash flow neutral at $US35 a barrel,” Mr Coleman said yesterday’s release.
Woodside also said 2018 investment spending would be between $US1.55 billion and $US1.6 billion, with investment in the Greater Enfield project expected to increase as subsea installation and drilling activities start, while spending on Wheatstone will be reduced Woodside shares fell 1.2% to $33.40.