Tracking well despite a slash in upper end of production forecast: In the third quarter 2017 update, Woodside Petroleum indicated for cutting down its upper end of FY17 production forecast at the back of delay in start-up of the Wheatstone LNG project in Western Australia. Primarily, WPL expects to produce between 84 and 86 million barrels of oil equivalent (mmboe) against the earlier stated forecast of between 84 and 90 mmboe. The group had announced for the first production from Wheatstone on October 09, 2017 instead of prior scheduled August timeline. WPL had been putting efforts towards the start-up of two key projects, Wheatstone and the Persephone gas project of Western Australia in the third quarter 2017. On the other hand, group’s sales revenue surged from $867 million in the previous quarter to $914 million in third quarter, although 7% below third quarter of last year, at the back of improvement in volumes (21.1 mmboe).
It is worth noting that revised forecast is still considered to be resilient with market expectations. The group expects near-term growth from LNG production at Wheatstone, which is expected to contribute more than 13 MMboe of annual production once its two LNG trains and domestic gas plant are fully operational.
Strong operational performance from Pluto LNG: While the group’s production in three months ending September of 20.3 mmboe was slightly below the previous quarter; daily, weekly and monthly production records were achieved at its Pluto LNG project. For the second quarter in succession, Pluto achieved a number of production records, with production in July 3% above the previous high record set in the same month of last year. The group has also now delivered 350th Pluto LNG cargo.
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Quarterly Production (Source: Company Reports)
WPL is also progressing well with regards to exploration and drilling activity at Myanmar and Senegal. For managing risk, the group executed portfolio LNG sales agreement for delivery of up to 12 cargoes between April 2018 and March 2020, and has issued a US$800 million 10.5 -year bond with a coupon of 3.7% per annum.
Post the release of the announcement, WPL stock fell 1.8% on October 19, 2017.
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