Woodside Petroleum 

Running Projects to add to Profit: Woodside Petroleum Limited (ASX: WPL) has reported $541 Mn in profit after tax for 1H FY18 against $511 Mn posted in FY17. Revenue from ordinary activities for the company came in at $2,388 Mn, up 27% compared to the prior corresponding period. WPL also delivered higher operating cash flow of $1,540 Mn, up 25% that the first half of 2017. It was mainly driven by the rise in sales production and sales revenue during the same period. The company has declared fully franked, interim dividend of 53 US Cents per share in 1H 2018 with the record date of 24 August 2018 and payment date has been set to September 20, 2018.

The company has done well on its base business front with Pluto LNG exceeding 99% reliability and its LNG capacity increased to 4.9 Mtpa, 14% increase from the original design capacity. Total production guidance for the full year has been raised from 85-90 MMboe to 87-91 MMboe. Factors that have helped the company in increasing its annual production guidance include its Wheatstone LNG Train 1 exceeding the above nameplate production rates and Train 2 being on track. Further, its Greater Western Flank Phase 2 project is 92% complete and WPL is targeting start-up in Q1 2019. Similarly, the Greater Enfield project is 65% complete and first oil is targeted in 2019. By 2020, the project is expected to deliver over 10 MMboe.
Woodside has a very well-defined roadmap for 10 years which has been further divided into three phases as follows:


Business Roadmap (Source: Company Reports)

Stock Performance: The stock has performed well this year with a YTD return of 11.82% and continues to make higher highs and higher lows on the chart. The price is hovering around its crucial resistance level of $37.82 and upward movement is expected, once that hurdle is crossed. The stock is trading above its near-term exponential moving averages and holding above its support level of $36.20. We expect that the encouraging first-half numbers, increased full-year projection and management’s clear approach towards future would take the stock higher from the current levels. We recommend “Hold” on the stock at the current market price of $36.45.
 

Liquefied Natural Gas

Reducing Losses: Liquified Natural Gas Limited (ASX: LNG) has reported 24% drop in reported Net Loss for the period attributable to members for FY18. Net loss came in at $22.47 Mn in FY18 compared to $29.69 Mn in FY17. The decreasing loss has been the outcome of the company’s Magnolia LNG growth and liquidity management plan of the company.
Improving Demand: Demand growth has been witnessed in Asia and Europe and strong pricing across the world makes U.S. Gulf Coast LNG quite attractive. The company is upbeat about the Asian markets in particular since the growth has been witnessed in almost all the Asian markets, compared to the previous year.



Further, the company has raised the gross proceeds of A$28.2 Mn through a share placement to IDG Energy Investment Group Limited. LNG demand has been growing on the back of factors such as electrification & gasification of transport, air quality, bunkering among other trends.

Stock Performance: LNG has exhibited a stellar run this year, generating YTD return of 63.53%. The stock gave the double bottom breakout as it crossed the resistance level of $0.70 and sustained above that for few trading sessions before correcting. The correction came on the account of profit booking, with price respecting its support level of $0.67. In recent trading session, the stock has made a hammer pattern at the lower level suggesting that downside is limited. Further, the risk-reward ratio looks decent since the stock is trading near its support level and has room for upside. Growing demand in Asia and tight supply would work in favor of the company going forward. We maintain our “Hold” recommendation on the stock at the current market price of $0.705 (up by 1.439% on September 04, 2018).
 

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.