Woodside has secured a foundation customer for Scarborough. The deal is conditional on a final investment decision. Credit Suisse assumes Woodside has achieved the higher end of the 11.5-12% range for the LNG contract.
The broker believes this will be a start to de-risking the Scarborough project. The foundation contract should help bring more buyers on board, perhaps at higher prices if the long-term contracting market improves over the next 18 months.
The broker maintains an Outperform rating and reduces the target to $37.64 from $37.80.
Sector: Energy.
Target price is $37.64.Current Price is $34.10. Difference: $3.54 – (brackets indicate current price is over target). If WPL meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
