Stocks’ Details
Woodside Petroleum Ltd
Outstanding LNG performance: Woodside Petroleum Ltd (ASX: WPL) delivered a better than expected sales revenue of $914 million for the third quarter of 2017. The group’s Pluto LNG achieved daily, weekly and monthly production records. Their Monthly production rose 3% in July 2017 as compared to their earlier performance in July 2016. The group’s Wheatstone LNG started production while their Persephone achieved a combined flowrate design capacity of 475 mmscf/d. The group’s Phi Thit-1 well, which is located offshore Myanmar, intersected at a gross gas column of approximately 65 m. The group implemented portfolio LNG sales agreement for delivery of up to 12 cargoes between April 2018 and March 2020. WPL extended their funding capacity by issuing a US$800 million 10.5-year bond with a coupon of 3.7% per annum. WPL stock rallied over 11% in the last four weeks (as of November 06, 2017) and we believe this momentum will continue in the coming months. The stock also got a boost from overnight rise in oil prices and soared 3.4% on November 07, 2017. Given the catalysts that can underpin growth in LNG volumes in the future, we maintain a “Buy” recommendation on the stock at the current price of $33.29
Third quarter of 2017 (Source: Company Reports)
Origin Energy Ltd
Improving production: Origin Energy Ltd (ASX: ORG) delivered a production rise of 20% year on year (yoy) to 89.1 PJe in the September quarter of 2017 against the prior corresponding period. Their revenues rose 1% yoy to $678.6 million during the September quarter of 2017 against June quarter but reported a 58% rise against prior corresponding period. The group also made an agreement to sell their conventional upstream oil and gas business, Lattice Energy, to Beach Energy for $1,585 million. ORG is a large cap energy exposure and is expected to benefit from APLNG ramp-up, favourable domestic gas pricing, Lattice sale proceeds, and energy markets’ earnings. Given the over 50% run-up in the stock price in last one year and more upside momentum expected going forward, we put a “Hold” at the current price of $8.44
Beach Energy Ltd
Positive results: Beach Energy Ltd.’s (ASX: BPT) stock surged up 6.4% on November 07, 2017 with a boost from oil prices and positive sentiments, while the group announced for resignation of one of its directors. BPT had lately reported a new gas discovery at Lowry-1 that validates phase 1 expansion of the Middleton facility from 25 MMscfd to 40 MMscfd. They witnessed gas drilling success at Crawford-1 which now promises extension of the Brownlow Field. Third Cooper Basin JV drilling rig started with success at the Namur-5 gas appraisal well. The shares of BPT rallied over 65.3% in the last three months (as of November 06, 2017) and we believe this bullish momentum will continue in the coming months. We maintain our “Hold” recommendation on the stock at the current price of $1.16
Cooper and Eromanga Basins (Source: Company Reports)
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