Woodside Petroleum: June quarter result
About the author:
- Author name:
- By Adrian Prendergast
- Job title:
- Senior Analyst
- Date posted:
- 16 July 2015, 4:03 PM
- Sectors Covered:
- Mining, Energy
A weaker second quarter result from Woodiside (WPL), with lower than expected LNG production adding to the anticipated decline in Q2 earnings from lower LNG and oil realised prices.
WPL reported Q2 total production of 20.1 mmboe (vs Morgans 21 mmboe), with the result impacted by an unplanned outage at the North West Shelf (NWS), in addition to the planned outage at Pluto.
Sales volumes were down further at 19.5 mmboe (vs Morgans 21 mmboe), which WPL attributed to the lower production and timing of shipments.
Sales revenue declined materially (as expected) on the drop in oil price, although some last elements of lag in the LNG pricing mechanism did assist in offsetting lower sales volumes. WPL reported Q2 sales revenue of US$898m (vs Morgans US$873m). Again WPL managed to also profit off LNG trading activities, posting gross trading revenue of $90.6m.
Our view
We continue to see significant headwinds for WPL in terms of near-term share price catalysts:
- The anticipated drop in dividend (to be announced at the upcoming half year result in August)
- The prospect of weaker second half earnings as the full effect of falling oil prices is factored in
- A continuation of difficult operating environment which remains a challenge for WPL's growth aspirations in Browse and Kitimat LNG.
More information
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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.
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