Rather than announce it in Australia where most of his company’s shareholders live Woodside CEO Peter Coleman has revealed plans to cut its stake in two key assets to raise funds for other developments in an interview with a global news agency.
Woodside appears headed for a weaker interim result thanks to the gradual slide in oil prices in the June quarter and a surprise series of maintenance delays at its Pluto field off the WA Northwest coast.
Credit Suisse observes the shutdown at Pluto has affected revenue and production costs in the second quarter. Yet, the negatives in the June quarter are largely considered one-off and, the broker suspects, over emphasised by the market.
A site visit to Woodside Petroleum's Karratha failed to inspire the broker. While the company has moved towards a more conservative contracting strategy on its Scarborough project, bringing greater certainty for shareholders, it comes at an increased cost.
March quarter production was -3% below Citi's expectations because of unplanned outages in Western Australia. The company has indicated that Scarborough marketing is being slowed as prevailing prices have been too low.
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.