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Woodside revenues fall on lower oil price

22nd October 2020

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Australian oil and gas producer Woodside Petroleum has reported a 9% fall in sales revenue during the three months to September, despite a 2% increase in production.

Production during the three months to September reached 25.3-million barrels of oil equivalent, up 2% from the June quarter, while revenue for the period was down 9% to A$699-million.

The revenue achieved in the September quarter was also down 42% on the previous corresponding period.

“As expected, sales revenue in the third quarter was impacted by lower realised liquefied natural gas (LNG) prices, reflecting the oil price lag in many of our contracts. Pricing in the fourth quarter and in the first quarter of 2021 is expected to be stronger, given the improvement in oil prices in recent months. In particular, I am encouraged by the strengthening Asian LNG spot price, which is now above $6.50/bl for December deliveries,” said Woodside CEO Peter Coleman.

“The operating performance of our LNG facilities during the quarter was strong. Pluto again demonstrated high reliability, with LNG production climbing by nearly 4% compared with the second quarter.

“Planned maintenance at Karratha gas plant’s LNG Train 3 was completed on schedule with appropriate Covid-19 management, and the facility has now returned to full operating rates,” Coleman said.

He noted that the changes implemented in March this year, in response to the Covid-19 pandemic, along with the lower commodity prices, had been embedded in the company’s operating model, and Woodside was continuing to pursue opportunities to reduce costs while maintaining safe and reliable operations.

The ASX-listed company conducted an organizational review of the company’s future workforce requirements, which resulted in an 8% reduction in the size of its direct employee workforce.

Meanwhile, Coleman on Thursday noted that the company was continuing with its growth plans during the quarter, with Woodside increasing its stake in the Sangomar Field development, offshore Senegal, and executing a sale and purchase agreement with Capricorn Senegal for its entire participating interest.

The additional interest is expected to increase 2P reserves by some 68-million barrels of oil equivalent.

“Processing of new 3D seismic data of the Sangomar field is complete and early interpretation indicates significant seismic resolution improvement. This improved data quality provides additional confidence in the Phase 1 development and is likely to assist in de-risking future development phases,” Coleman said.

The Sangomar Phase 1 development will focus on developing the less complex reservoir units and testing other reservoirs to support gas export to shore. Phase 1 is targeted to produce some 230-million barrels of crude oil.

Meanwhile, for the Scarborough field, off Western Australia, Woodside also progressed detailed studies for potentially increasing the upstream processing capacity by some 20%, in order to optimise the development of large offshore resources, Coleman said.

Edited by Creamer Media Reporter

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