18/02/2021 - 10:00

Woodside reports $US4bn loss despite record production

18/02/2021 - 10:00

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Impairments drove Australian petroleum company Woodside to a net loss of $US4 billion, but underlying profit was $US447 million.

Woodside reports $US4bn loss despite record production
Woodside chief executive officer Peter Coleman said the $US4 billion loss was a result of non-cash impairments and an onerous contract provision.

Impairments drove Australian petroleum company Woodside to a net loss of $US4 billion, but underlying profit was $US447 million.

Woodside reported the impairments in July last year, attributing them to the uncertain global investment environment caused by the COVID-19 pandemic and the oversupply of crude oil and LNG, which sent prices plummeting.

The company's Karratha operations were also affected by tropical cyclone Damien, which forced the evacuation of Woodside staff.

In the time since, LNG prices have recovered and the company's production has exceeded 100 million barrels of oil equivalent for the first time in its history.

Woodside outlined its full-year results in an ASX announcement this morning, attributing the loss to non-cash impairments and an onerous contract provision for the sale of Corpus Christi LNG announced last July. 

But Woodside chief executive officer Peter Coleman remained positive, highlighting that it had also experienced a record-breaking year for production and its best-ever year for safety performance.

He said the company made a series of decisions in the wake of the pandemic and the lower oil and gas prices in a bid to safeguard its financial position, including the deferral of its targeted final investment decision on its Scarborough and Pluto Train 2 developments and a major review of its assets.

“Our disciplined balance sheet management has safeguarded Woodside’s financial resilience and positioned us to take advantage of emerging growth opportunities as markets recover,” Mr Coleman said.

“The potential strength of that recovery is already being signalled by the recent increase in oil price and record spot LNG prices achieved in Asia over the Northern Hemisphere winter.”

Mr Coleman named the execution of Woodside's Pxyis Hub and Julimar-Brunello Phase 2 drilling campaigns, and a 20 per cent increase of its offshore capacity of Scarborough, among the company's highlights for the year.

In that period, Woodside also took a major step towards transforming Australia’s largest LNG plant into a third-party tolling facility, finalising agreements to process gas from Pluto and Waitsia in the North West Shelf.

According to Mr Coleman, the company’s Sangomar offshore oil project in Senegal remains on target for first oil in 2023.

He said its new energy businesses had also progressed, with its proposed renewable hydrogen project in Tasmania having been shortlisted for funding through the Australian Renewable Energy Agency.

Woodside declared a final dividend of $US0.12 per share, bringing the full-year dividend to $US0.38.

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