Woodside Petroleum Ltd.’s (ASX: WPL) stock edged a bit lower as it provided its fourth quarter 2017 update and flagged that the investment expenditure guidance for 2018 is in the range of $1,550m to $1,600m with production guidance of 85 - 90 MMboe. The group’s sales revenue has been indicated to get an impact from the timing with production volumes higher than sales volumes.
Despite stronger realised prices, group’s revenues of $939 million ($1.2 billion) for the fourth quarter were 6.9% below the figure reported in prior corresponding period but better than September quarter. Further, production of 21.9 million barrels of oil equivalent slipped by 7.9% below prior corresponding period even with the commencement of the Wheatstone LNG project (although hit by some delays and shut-down) and record fourth-quarter output from the Pluto LNG plant. This led to the full-year output to touch 84.4 million boe and the same is expected to increase to be between 85 million and 90 million boe in FY18. WPL expects the domestic gas production to commence in H2 2018 and is facilitating the completion of the second production line at the Wheatstone plant.
Investment Expenditure (Source: Company Reports)
Woodside has otherwise provided a positive outlook for prices and LNG output in FY18, and believes that stronger oil prices experienced in the fourth quarter will flow through to higher realised LNG prices in the first quarter of 2018. WPL also indicated for a substantial increase in annual LNG production in 2018 and to become cash flow neutral at $35 a barrel.
For the growth project, the Browse gas venture, commercial discussions have been indicated to be progressing between the partners and the North-West Shelf venture with regards to processing of Browse gas. The group will now be investing on the Greater Enfield project with commencement of subsea and drilling activities.
Late last year, the group amended the existing $1.2bn unsecured syndicated debt facility, resulting in an $800m facility of two equal tranches expiring in July 2020 and July 2022.
Given the potential expected from key projects and LNG scenario, we have a “Hold” on the stock at the current price of $33.40
Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.