Woodside Petroleum, Australia's largest oil and gas operator, said Wednesday in its earnings statement that its reported net profit for 1H 2012 fell 2 percent to $812 million from $828 million in the same period last year.
The company said that its reported profit fell largely due to a number of one-off items related to the start-up of the Pluto LNG project.
"A $28 million [loss] relates to the after-tax impact of Pluto delay mitigation costs," Woodside's Executive VP and CFO Lawrie Tremaine said in a statement.
Tremaine was however quick to point out that the Pluto project has made a positive contribution to Woodside's oil and gas production in 1H 2012. According to Tremaine's published presentation, oil and gas production for Woodside rose 7 percent to 34.2 million barrels of oil equivalent (MMboe).
"Not surprisingly, the start-up of Pluto is the major reason for this increase. Pluto has contributed 5.3 MMboe … this is more than 2 MMboe higher than our pre start-up expectation," Tremaine said.
Pluto was also cited as the main reason for Woodside's increased operating revenue. The company's 1H 2012 operating revenue was $2.7 billion, up 18 percent from the same period last year.
"The increased revenue is due, in roughly equal portions, to higher sales volumes, again with Pluto as the main contributor," Tremaine added.
Looking forward into 2H 2012, Tremaine forecasted that Woodside could see a full year cash flow result that rivals its previous best annual result back in 2008 due to a combination of current high oil prices and continuing good production performance at Pluto.
Commenting on Woodside's development plans for Pluto, the company's CEO and Managing Director Peter Coleman said that a fourth liquefied natural gas (LNG) tanker will be added to Pluto's fleet from mid-2013. The LNG tanker is on a time charter of up to 20 years.
"This will enable us to meet the needs of long-term customers and also take advantage of the strong demand in the LNG spot market," Coleman added.
Coleman noted in his published presentation that the progress on expanding Pluto is proving to be challenging. He said that Woodside has had disappointing exploration results over the past two years, and that the company does not yet have sufficient discovered volumes to progress an equity gas expansion.
"We will be taking time to pause our drilling activities to evaluate and refresh our exploration portfolio in the region," Coleman said.
Coleman also mentioned that Woodside is not ruling out the option to expand Pluto through the commercialization of other resource owner gas.
"We have been in discussions with several gas owners in the region for some time now … while these discussions are encouraging, they are inevitably complex and it will take some time to conclude these talks," Coleman said.
A spokesperson representing Woodside told Rigzone on Wednesday through a telephone interview that the company had been in discussions with gas owners based in the Carnarvon Basin, but she declined to provide names.
Pluto was started up on May 12, 2012. The project – which took seven years from discovery to production – has shipping out 8 LNG cargoes from May to June. The initial phase of Pluto comprises of an offshore platform in 278 feet (85 meters) of water, connected to five subsea wells on the Pluto gas field. Gas is piped in a 112 miles (180 kilometers) trunkline to the onshore facility, sited between the North West Shelf Project and Dampier Port on the Burrup Peninsula. Offshore infrastructure consists of a single LNG processing train with a forecast production of 4.3 million tonnes per year.
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