Woodside all positive about the potential of the Scarborough gas resource

Oil and Gas companies (O&G) in Australia have been at the forefront of the industry’s efforts to deal with remoteness, risk, social pressure and inherent technical challenge. The country has a strong and stable economy, based largely around traditional primary industries such as Mineral, Petroleum, Resources and agriculture with low barriers to trade and investment. The country has free trade agreements with nations such as The United States, Thailand, Malaysia, Singapore and Chile.

Oil and Gas Sector – An Overview 

As per market experts, Australia seems to be well positioned to enhance its capability as the key supplier to surging growth in global LNG (liquefied natural gas) market. However, some believe that the relatively complex domestic regulatory framework, high-cost production combined coupled with current policy uncertainty pose key challenge to the nation to tap the booming market opportunity.

Recent Study on Petroleum Prices in Australia

The ACCC continues to monitor retail prices and GIRDs (gross indicative retail differences) across Armidale, Cairns, Launceston and Darwin.

Below table shows the quarterly average retail petrol price and GIRDs in these locations during the June quarter 2019. Based on the ACCC calculations, the costs such as freight and operating costs per litre basis are higher in these locations while assuming that the retail margin in these locations would be like long-term average margin in five largest cities.

Oil and Gas Sector Performance

An upward trend in the S&P/ASX 200 index can be seen on 11 November 2019. The S&P/ASX 200 index is trading at 6,762.7 points, with a rise of 0.6 per cent (at AEST 3:54 PM). The S&P/ASX 200 Energy index is trading higher at 11,330.5 points, with a rise of 0.68 per cent from the previous close.

In this article, Let’s have a look at Woodside Petroleum Limited from the Energy sector and the recent updates.

Woodside Petroleum Limited (ASX: WPL)

Woodside Petroleum Limited headquartered in Perth is a leader in the LNG industry in Australia, while eyeing to become a global leader in upstream oil and gas.  The largest local natural gas producer explores oil and gas in offshore and onshore facilities in Western Australia and Northern Territories. WPL product includes domestic gas, liquified Petroleum gas (LPG), liquified natural gas and crude oil. 

Scarborough Resource Volume Increased By 52%

On 8 November 2019, the company had made an announcement that the estimated gross contingent resource (2C) dry gas volume for the Scarborough field has increased to 11.1 trillion cubic feet, representing an increase of 52% from 7.3 trillion cubic feet.

The company earlier reported completion of integrated subsurface studies incorporating updated petrophysical interpretation and FWI 3D seismic reprocessing that enhanced the reservoir sand distribution and reservoir imaging quality.  Also, the company reported increased gas saturations and net sand proportion based on measurements from special core analysis and a comprehensive review of the wireline log data.

WPL’s overall contingent Resources (2C) was boosted by 503MMboe to 6,020 MMboe. 

Change in Substantial Holding

On 31 October 2019, the company announced the change in substantial holding of Vanguard Group with 56,772,669 shares, representing 6.025 per cent voting power against 47,017,775 shares (5.022 per cent voting power) held previously.

Sales Revenue soared by 58 Per cent in Q3 FY 2019

On 17 October 2019, Woodside Petroleum announced the third quarter report for the period ended 30 September 2019. Few highlights of the financial results are as follows:

  • The Pluto liquified Natural Gas (LNG) accomplished record quarterly production and 99.7 per cent reliability following the execution of the major turnaround in the previous quarter;
  • The company delivered production of 24.9 MMboe, up by 44 per cent on pcp;
  • Sales revenue increased by 58 per cent to $1,164 million due to 44 per cent in the increase in the production and strong realised LNG pricing from the previous quarter;
  • The company executed major integrated turnarounds at the North West Shelf project;
  • The company signed mid-term agreements for the supply of around 3.5 million tonnes of Liquified Natural Gas in the period 2020 to 2026.

According to the company’s CEO, Peter Coleman, “The major growth projects are progressing well towards key decision points and the final investment decision for the Pyxis Hub Project, comprising the subsea tieback of the Pyxis, Pluto North and Xena 2 infill wells. The Scarborough continues as planned in support of FID targeted for H1 2020 and the company has signed a HOA with Uniper for the supply of LNG for a period of 13 years from 2021”.

Dividend Re-Investment Plan (DRP) Share Price for 2019 Interim Dividend 

On 13 September 2019, WPL had announced the DRP price for the 2019 interim dividend to be paid in respect of period ending 30 June 2019 is $31.3447.

For 2019 Interim dividend, the DRP price has been calculated by using a volume-weighted average price over ten trading days during the period from 29 August 2019 to 11 September 2019 inclusive. The concerned shares are expected to be issued to participants on 20 September 2019.

The below table shows the company’s dividend payment history over the period to their shareholders.

Stock Performance 

The stock of WPL traded at $34.120, up 1.46% on 11 November 2019 (at AEST 3:54 PM) with ~942.29 million outstanding shares and a market cap of $31.69 billion. The WPL’s, 52 weeks low and high value of the stock is at $29.330 and $37.700 respectively. The stock has generated a negative return of 3.47 per cent in the last six months and a positive return of 10.30 per cent on year to date basis.


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