Woodside's 3Q 2015 Revenue at $1.09B, Down 45% YOY

Australia's Woodside Petroleum Ltd. posted third quarter (3Q 2016) sales of $1.086 billion, down 44.6 percent from the previous year's $1.959 billion, with the oil and gas producer attributing the decline to lower oil prices, the company said in its release of quarterly financial results Thursday.

Production volumes rose by a marginal 0.4 percent in 3Q 2016 to 25.3 million barrels of oil equivalent (MMboe), with the increase due to the production from the Balnaves oil asset which came online in April. The addition of Balnaves production was partially negated by lower liquefied natural gas (LNG) and associated condensate production at North West Shelf due to a planned LNG Train 5 maintenance turnaround which was completed ahead of schedule during the quarter.

Woodside has narrowed the 2015 production target range to 88 to 93 MMboe from 86 to 94 MMboe. The narrower production range resulted from an approximately 1.0 MMboe addition from the Pluto LNG project (with a major turnaround completion 10 days ahead of schedule), a 1.3 MMboe addition due to the Vincent Phase IV in-fill well and around 1.25 MMboe reduction for Canadian pipeline gas not produced due to the delayed completion of two Liard wells.

Meanwhile, the firm entered into a conditional agreement to sell its interests in the Laminaria-Corallina Joint Venture, including the Northern Endeavour FPSO (floating production, storage and offloading). Completion and transfer of ownership is expected in 2Q 2016 upon recepit of regulatory approvals, with the expected impact on 2015 profit to be reported in the 4Q 2015 report.

On development projects, Woodside revealed that the Browse FLNG joint venture (JV) has received environmental approval to proceed with the development. The Browse JV has commenced negotiating the Browse Development Agreement with the State to give effect to the Browse FLNG Development Domestic Gas and Supply Chain Key Principles Agreement executed in June.

Woodside reported that the Chevron-operated Wheatstone LNG Project is more than 65 percent complete, with first production planned for late 2016. The Julimar project, comprising the Julimar and Brunello fields, ties into the Wheatstone offshore platform and remains on track to start-up in 2H 2016.

In August, partners in the Greater Enfield Development have approved entry into the front end engineering and design (FEED) phase for the proposed project, which involves the tie-back of the Laverda and Cimatti oil fields through a 19 mile (31 kilometer) flowline to the Ngujima-Yin FPSO vessel and is targeting gross (100 percent) contingent resource (2C) of 70 MMboe. Woodside indicated that contracts have been awarded for subsea hardware, FPSO modifications engineering and procurement, shipyard support, geophysical and geotechnical surveys as part of the FEED phase. The proposed development is targeting an FID (final investment decision) in the 2H 2016.

Over in the North West Shelf, the firm reported that platform modifications and fabrication of key subsea infrastructure on the North Rankin Complex for the Persephone project continued during the quarter. The project remains on budget and on schedule for start-up in early 2018.

On the Greater Western Flank Phase 1 Project, subsea installation and pipeline pre-commissioning activities were completed and commissioning activities commenced to enable project start-up. Drilling and completion activities on the wells commenced and are due for completion in early 4Q 2015 and the project remains on budget with first gas expected ahead of schedule in late 2015.

Meantime, key design and assurance activities for the Greater Western Flank Phase 2 Development were completed to support a planned FID in 2H 2015, subject to regulatory approvals. Separately, Woodside decided to defer the proposed Cossack North oil development to a later date after a review of its portfolio-wide capital expenditure.

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