PERTH (miningweekly.com) – Oil and gas major Woodside has reported record production for the first six months of the 2020 financial year, despite unprecedented disruptions to the company’s operations and markets with the onset of the Covid-19 pandemic.
Production in the first half of the year reached 50.1-million barrels of oil equivalent, up from the 39-million barrels in the first half of last year. However, the miner has reported a net loss after tax of $4.06-billion for the period, on the back of impairment losses as oil prices tumbled.
The company in July warned of a non-cash, post-tax impairment loss of $3.92-billion, relating both its production and exploration assets. Combined with onerous contract provisions, the company flagged a post-tax loss of $4.37-billion.
“Woodside’s operational performance during the first half of 2020 was nothing short of outstanding. In February, we successfully weathered Tropical Cyclone Damien, the most severe storm ever to pass over our Western Australian facilities, with very limited impact on production,” said CEO Peter Coleman on Thursday.
“In the immediate wake of Damien, we faced the emerging challenge of Covid-19, requiring us to take swift and decisive action to protect our workforce, communities and operations and ensure safe and secure gas supplies to customers in Western Australia and overseas.
“The record production achieved in the first half is a credit to our people’s ongoing commitment to sustained operational excellence, helping Woodside deliver underlying net profits after tax of $303-million, despite the challenging market conditions,” said Coleman.
Operating revenue for the first half reached $1.9-billion, down from the $2.2-billion reported in the previous corresponding period, while earnings before interest, taxes, depreciation and amortization decreased from the $1.4-billion reported in the first half of 2019, to a loss of $4.29-billion.
“I would rate the external conditions created this year by the Covid-19 pandemic and oversupply in global oil and gas markets as the most difficult I’ve seen in nearly four decades in the industry,” said Coleman on Wednesday.
“Woodside began 2020 in a strong financial position, built over the previous two years as we prepared for a period of increased capital spending. This position has been consolidated through the first half thanks to the strong performance of our high-reliability, low-cost operations.
“Our balance sheet strength and disciplined approach to capital management ensures we can deliver appropriate returns to shareholders. It also allows us to progress our existing strategic growth plans, and provide optionality to pursue the right external opportunities, should they arise.”
Coleman reiterated that the company remained committed to developing the Scarborough and Browse gas resources through the proposed Burrup Hub, saying it has continued work on commercial agreements and regulatory approvals to ensure the company is ready to take a final investment decision when investment conditions improved.