Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Woodside flags drop in gas reserves, shares dip

Stock MarketsOct 21, 2021 04:20
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: The logo for Woodside Petroleum, Australia's top independent oil and gas company, adorns a promotional poster on display at a briefing for investors in Sydney, Australia, May 23, 2018. REUTERS/David Gray/File Photo

By Sonali Paul

MELBOURNE (Reuters) -Woodside Petroleum slashed its gas reserves estimate for two fields at the Wheatstone project on Thursday, in an unexpected downgrade that knocked the top Australian oil and gas company's shares.

The company also said it was on track to sell down stakes in its $12 billion Scarborough gas project and Pluto LNG train 2 and $4.6 billion Sangomar oil project in Senegal, with soaring oil and gas prices improving its bargaining position.

"It certainly doesn't hurt to have oil prices in the $80s and record LNG prices and supply crunches at the time you're doing this," Chief Financial Officer Sherry Duhe told Reuters.

Woodside expects to announce selldowns on the Scarborough and Pluto in time to make a final investment decision on those projects by Dec. 15, she said.

Shares in Woodside, which is poised to merge with the petroleum arm of BHP Group, fell as much as 1.8% in a flat broader market after it cut its reserves estimate and reported weaker-than-expected third quarter sales revenue.

Woodside cut estimated total proved and probable reserves from the Julimar and Brunello fields, which contribute one-fifth of the gas at the Wheatstone LNG project run by Chevron Corp (NYSE:CVX), by 27% to 168.4 million barrels of oil equivalent.

"Overall it does not change our fundamental view this is a multi-decade high quality asset and any changes in these reserves are back at that tail end of production anyway," Duhe said in an interview.

She said the downgrade would have no impact on production at the 8.9 million tonnes a year Wheatstone LNG plant and would not impact the merger ratio with BHP's petroleum arm.

The reserves estimate cut stemmed from reviewing well performance, drilling results and a reassessment of seismic data on the reservoir.

Woodside said its quarterly revenue more than doubled to $1.53 billion from $699 million a year ago, boosted by sales of third-party volumes into a hot spot market. However, it missed a broker consensus forecast of $1.69 billion.

It expects to benefit more from the strong prices in the fourth quarter, as most of its contracts are tied to oil prices with a three-month lag.

Woodside has more exposure to spot LNG prices, which have soared to record highs, than local rivals Santos, Oil Search and Origin Energy.

It expects about 17% of its produced LNG to be sold into the spot market in the fourth quarter.

Woodside flags drop in gas reserves, shares dip
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email