20/02/2013 - 07:35

Woodside focuses overseas after profit lift

20/02/2013 - 07:35


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Woodside focuses overseas after profit lift

Shares in Woodside Petroleum have hit an 18-month high as the group delivered higher esarnings from its Australian oil and gas assets and outlined plans to invest in two overseas projects.

Woodside's share price jumped 3 per cent today to $39.07, after being as low as $35.00 at the start of the month.

The company today reported a 25 per cent gain in underlying net profit to US$2.06 billion for the year to December 2012, a record level.

Its statutory net profit achieved an even more spectacular gain of 98 per cent to US$2.98 bilion. The statutory 2012 number was boosted by the sale of equity in its Browse project while the 2011 result was depressed by costs associated with completion of its Pluto liquefied natural gas (LNG) plant.

Chief executive Peter Coleman said the underlying 2012 result was underpinned by a 31 per cent increase in production and 30 per cent lift in sales revenue to US$6.2 billion.

Production in 2012 was 84.9 mmboe, up 31 per cent from 64.6 mmboe in 2011.

The Pluto LNG project and higher contributions from the Vincent and North West Shelf oil facilities also helped improve earnings.

"Woodside's production target for 2013 remains unchanged at a range of 88 to 94 MMboe (million barrels of oil equivalent), comprising 47 per cent from NWS Gas facilities, 41 per cent from Pluto LNG and 12 per cent from other assets," Woodside said.

Pluto had performed at better-than-expected rates due to high reliability in the production ramp-up phase, it said.

Between its start-up last April and the end of calendar 2012, it produced 2.7 million tonnes of LNG and 2.1 million barrels of condensate.

Woodside's investment expenditure fell 53 per cent in 2012 to .8 billion, largely driven by lower expenditure at Pluto.

Woodside increased its capital expenditure budget for 2013, with a forecast it will spend about .0 billion on the Leviathan gas project in Israel.

"Investment expenditure for 2013 is expected to be .6 billion, which is higher than previous guidance due to anticipated additional expenditures associated with the Leviathan and Myanmar opportunities," Woodside said.

The expected investment expenditure comprises .1 billion capital plus million of exploration expenditure.

The company said it was still aiming to be ready for a final investment decision on the politically-charged Browse LNG project by the middle of this year.

There has been mounting speculation that plans for a land-based LNG plant near Broome will be shelved because of increased costs, and that a floating LNG plant will be pursued instead.

Woodside is also pursuing talks with the government of East Timor over its delayed Sunrise project.

Morningstar analyst Mark Taylor said the strong profit result was within market expectations on the back of Pluto's solid contribution.

But, he said, he was disappointed the company would push ahead with the Israel project.

"It's an unnecessary diversification away from their core area of expertise and where they're located," he said.

Mr Coleman's $7.3 million 2012 pay packet was up from $3.8 million in 2011 and included $2.6 million in shares.

Woodside lifted its fully-franked final dividend by 10 US cents, to 65 US cents.


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