Rising Oil Prices Boost Woodside Revenue

PERTH (miningweekly.com) – ASX-listed Woodside Petroleum posted a 19% increase in revenue for the third quarter ended September, compared to the previous quarter, despite a 2% decline in the production.

The company said on Thursday that production in the three months leading up to September reached 22.2 million barrels of oil equivalent, while sales revenue reached AU $ 1.53 billion.

CEO of Woodside Meg o’neill third quarter revenue increased 19% over the previous three months due to higher average realized prices for liquefied natural gas (LNG).

“LNG sales revenues during the period were 27% higher than in the second quarter, despite the impact of production on planned maintenance activities on the North West Shelf and Pluto LNG project.

“The realized LNG price in our portfolio was $ 57 per barrel of oil equivalent and our strong realized oil price of $ 80 per barrel reflects the continued demand for Vincent crude in the oil blend markets.

“We expect in the fourth quarter to benefit from higher pricing on our realized prices, reflecting the lag in oil prices in many of our contracts and recent price increases at gas hubs. Our production forecast remains unchanged at 90 to 93 million barrels of oil equivalent. “

O’Neill noted that global oil and gas prices continued their upward trajectory, underscoring the rebound in demand as economic activity picked up in Asia and elsewhere. In addition, short-term gas hub prices in Europe and Asia have seen unprecedented and sustained increases in value and volatility, with price indexes in both markets recently reaching all-time highs.

“Woodside’s non-contract LNG production sold on a spot basis is expected to be just over 15% and includes additional November spot volume recently distributed to Woodside from the Northwest Shelf. During the quarter, we sold six spot LNG cargoes in equity and currently expect approximately 17% of the LNG produced to be sold for spot in the fourth quarter. “

Meanwhile, O’Neill noted that the deal to pursue a proposed merger between Woodside and BHP’s oil business is progressing as planned. The signing of a share sale agreement and an integration and transition service agreement was expected in November, ahead of expected completion in Q2 2022 after all approvals.

It is proposed that BHP’s oil and gas activities merge with Woodside and that Woodside issue new shares for distribution to BHP shareholders. The expanded Woodside would be 52% owned by existing Woodside shareholders and 48% owned by existing BHP shareholders.

The proposed merger would create the largest energy company listed on the ASX, with a global position in the top 10 of the LNG industry in terms of production, with the merged entity having delivered some 200 million barrels of oil equivalent to the during fiscal year 2021.

The merged company would have a diversified production mix of 46% LNG, 29% oil and condensate and 25% domestic gas and liquids, as well as a broad geographic reach with production from Western Australia , from the east coast of Australia, from the Gulf of Mexico to the United States and Trinidad and Tobago with about 94% of the production of OECD countries. In addition, the expanded Woodside would have 2P reserves of more than two billion barrels of oil equivalent comprising 59% gas and 41% liquids.

O’Neill also told shareholders on Thursday that Woodside was on track for its Final Investment Decision (FID) targeted at Scarborough and Pluto Train 2 developments before the end of this year.

“All major contracts and environmental approvals from the Commonwealth and Western Australia to support an FID are now in place, and trade agreements are about to be finalized.

“Sales of Scarborough and proposed Pluto Train 2 shares are progressing well, and the timing of the Pluto Train 2 sale is aligned with the targeted FID later this year.

“An important milestone has been taken with the issuance of limited notice to proceed to Bechtel for Pluto Train 2, allowing engineering and procurement activities to progress, as well as the start of initial work for the village of temporary construction accommodation in Karratha.

“Significant progress has been made in our phase 1 development of the Sangomar field off Senegal, with the project’s first development well drilled and completed. We have also entered into discussions with interested parties for the proposed sale of our stake in the Sangomar project to a target of 40-50%.

“We have secured emerging opportunities as part of our strategy to create significant activity in new low-carbon energy sources. These include the signing of an agreement to undertake a joint feasibility study on the development of an ammonia supply chain from Australia to Japan and a commitment to invest in HyStation, a company that aims to accelerate the conversion of South Korea’s bus fleets from diesel to hydrogen. .

“Additionally, in October, we announced our collaboration with Heliogen to begin supplying a 5 MW commercial scale demonstration facility using Heliogen’s AI-enabled concentrated solar technology,” a- she declared.

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Steve R. Hansen

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