Liquefied Natural Gas Limited

Liquefied Natural Gas Limited (ASX: LNG) with a market cap of $282.64m, is the developer of LNG export terminals and has over 20mtpa of Atlantic Basin capacity under development. The company recently gave its quarter report for the period ended on September 30, 2018.

Moderate Growth:Net operating cash flows reported for the quarter ended on September 30, 2018 was $4.8m in comparison to $6.2m for the quarter ended on June 30, 2018. 8.4% drop in the total cash balance to $46.4m included $25.2m of restricted cash as compared to $50.7m during the quarter ended on June 30, 2018. No debt was recorded as on September 30, 2018.

Strong LNG demand to boost growth:Overall positive outlook for the commodity and growing demand driven by global GDP, transport electrification and gasification will increase the production for new LNG by late 2022. LNG has recently signed long term contracts for Magnolia LNG which is expected to commence the operations by 2022. Increase demand of LNG will be well supported by the commencement of the Magnolia LNG.

Technically the scrip ended the month of October with the formation of “Hammer "pattern, indicating some reversal. The scrip showed recovery in the first week of November month. Major indicators like Relative Strength Index showing slight negative divergence along with MACD (moving average convergence and divergence indicator) consolidating indicate for restricted upside move at the moment.

The market cap of LNG was recorded at $282.64m, with beta above 1.0x. Growing demand of LNG with additional supply needed will be met by some projects that are currently under construction and will reach an operational state in the next 12 months. While the stock is down 4% on November 19, 2018, we givea “Hold” on LNG at the current levels of $0.475.

Woodside Petroleum Limited

Woodside Petroleum Limited (ASX: WPL) with a market cap of $30.91bn made a strong progress on their near-term growth projects at Greater Western Flank Phase 2 and Greater Enfield during the third quarter ended om September 30, 2018. Company expects to execute their next phase of developments in Senegal the Burrup Hub.

Strong quarterly operating and financial metrics:  LNG posted 25.4% growth in sales revenue to $1157m for the third quarter ended on September 30, 2018 as compared to the $923m during Q3FY2017. Growth in sales revenue was well supported by the higher prices. 13.8% rise in the production output to 23.1 MMboe in Q3FY18 as compared to 20.3Mmboe in Q3FY17 from the Wheatstone LNG, and 4.5% rise in the output to 23.1 MMboe in Q3FY18 as compared to 20.1 MMboe in Q2FY18 were noted. Exploration and evaluation expenses reduced to $53m in Q3FY18 from $138m in Q2FY18.

Technically, the scrip ended the October month in negative territory and is continuing the trend for the current month also. The market cap of WPL was recorded at $30.91bn, and P/E of 20.85x and beta below 1.0 x. However, the company has posted strong production output data with healthy financial metrics, but with no clear indications from the technical charts, we give a “Hold” on WPL at the current levels of $32.55.
 
 

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