Lower prices undercut Woodside output record
Woodside notched a quarterly record for oil and gas production, but sales revenue plunged 29pc due to lower energy prices.
Woodside Petroleum notched a quarterly record for oil and gas production in the three months through June, but sales revenue dropped by 29 per cent as it felt the sting of lower energy prices.
Woodside said it produced 25.9 million barrels of oil equivalent in its fiscal second quarter, up 7 per cent on output in the previous three months. That brought first-half oil and gas production to 50.1 million barrels, up 28 per cent on a year ago.
Chief executive Peter Coleman said the production result was achieved despite first-half challenges including the impact of Tropical Cyclone Damien and the slump in commodity prices.
“The upshot of this sustained organisational effort has been our best-ever operating results, achieved in a time of extraordinary uncertainty and exemplifying the strength and resilience of our people and business,” he said.
Sales revenue fell to $US768 million in the second quarter, reflecting lower realised prices. Woodside said its oil output fetched an average of $US31/bbl in the second quarter versus $US52/bbl in the first three months of the year.
The price of liquefied natural gas produced by facilities including Pluto and the North West Shelf also dropped to $US5.00 per million BTU, from $US8.10 per million BTU in the first quarter.
A day earlier, Woodside forecast an impairment charge of $US3.92 billion against the value of its oil and gas assets, as it grapples with a more subdued outlook to energy prices and the coronavirus pandemic.
Woodside said a $US2.76 billion charge would be taken against oil and gas properties from Australia to Senegal. The largest hit, at nearly $US1 billion after tax, relates to the Wheatstone liquefied natural gas project offshore Australia and reflects the company’s reduced assumptions for oil prices.
A further $US1.16 billion impairment charge will be taken against four exploration and evaluation assets, including the Sunrise natural-gas project offshore East Timor and the Kitimat LNG project in Canada.
Woodside said it also expects its first-half results in August to include an onerous contract provision of $US447 million for the Corpus Christi LNG sale-and-purchase agreement.
Dow Jones Newswires
