Woodside has surpassed its production guidance for 2022 after it ramped up its output to a record level during the last three months of the year amid declining revenues sparked by a fall in oil prices.
The oil and gas giant reported a 0.7 per cent increase in production for the quarter compared to the three months earlier. At the same time revenue for the three months fell 12 per cent to $US5.16 billion ($7.32 billion) due to reduced trading and the oil price retreating from mid-year highs.
Delivered sales volumes fell 8.5 per cent in the December quarter primarily due to fewer third-party trades.
Woodside chief executive Meg O’Neill said the average price it received for its products dropped from $US102 a barrel of oil equivalent (boe) in the September quarter to $US98.
The wild ride of oil prices in 2022 resulted in Woodside losing $US872 million before tax on oil price hedging for the year with 44 per cent of the pain coming from hedges related to its contracted purchase of LNG from the Corpus Christi LNG plant in Texas.
In the second full quarter it has owned 50 per cent of the ExxonMobil-operated Bass Strait operation Woodside’s sales of gas were down 28 per cent due to planned offshore maintenance and the annual demand drop after winter.
The stark difference in Australia’s two domestic gas markets was shown by what Woodside received for gas on each side of the country: $5.3 a gigajoule in WA and $14.2 on the East Coast where no gas is reserved for domestic use.
Woodside’s statement to the ASX made no mention of whether it would recommence offering new supply on the East Coast. Both Woodside and Shell shuttered their marketing efforts in December in protest at the federal government’s efforts to rein in gas prices, but Shell relented on Monday.
Production guidance for 2023 is unchanged at 180 to 190 million boe.
Late this year Woodside should start producing oil from its Sangomar project which is 77 per cent complete.
“In Senegal, subsea installation and development drilling has progressed well, with seven of the planned 23 wells now completed,” O’Neill said.
Woodside spent $US1.77 billion on the Scarborough to Pluto gas export project in WA in 2022.
“The combined projects are now one-quarter of the way to completion and are on track for targeted first LNG cargo in 2026,” O’Neill said.
Woodside’s statement said engagement on environmental approvals continued for offshore construction activities, with no impact to the critical path.
Woodside needs the offshore environment regulator NOPSEMA to accept its plans for each scope of work before it can start work in the waters off WA.
However, two recent setbacks suffered by Santos on its Barossa gas project north of Darwin have shown that the project progress remains at risk even after a plan is accepted but the regulator.
Santos has been forced to suspend drilling last year after losing a Federal Court case over whether it properly consulted with Indigenous groups.
This week the regulator revealed pipeline construction was stopped just weeks before it was due to commence as Santos had to check it would not disturb seabed sites of significance to the Indigenous people of the Tiwi Islands.
The price of Woodside shares was almost unchanged in late morning trading at $37.70.
Source: Thanks smh.com